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HC2121 Comparative Business Ethics Proof Reading Service
Oil and gas are world's dependent commodities. Demand for such commodities has been continuously increasing. They are most commonly associated with machines and factories as well as are used to make commercial products. The demand for oil is so rapidly increasing that oil. Reserves are in an alarming situation and people are looking for alternative sources of energy. Oil and gas industry is subject to environmental risks associated with it. So, taking into consideration the possibility of these risks many safety procedures and processes have been adopted. Still, due to frequent occurring of such disaster, the views of stakeholders have put a serious question on its sustainability. In this case study, we have discussed the wreck of the Exxon Valdez Disaster. Due to delay in the arrive of containment equipment the situation of the disaster became worse. Due to disruption of communication network coordination between the shore and crew members made the situation more badly. Problems became so complicated that some safety corners had to be cut down. Exxon was held responsible for the disaster and further warranted. The after the cause of these incidents are, any lawsuits were filed against the company and they had to compensate the sufferers and furthermore, they paid restitution. People claimed the health and safety is a major concern. We have discussed that fracking is beneficial or harmful for the environment.
Fracking helped in creating more jobs where wells are located in Pennsylvania and North Dakota. Fracking provides us with economic benefits too. Fracking provides greater sustainability in comparison to any other energy source. Fracking uses chemicals as well. Fracking has been fully banned and efforts are made to reduce its environmental impacts. Rules have been implemented for reducing the leakage. Concerns have been raised over the release of methane gas efforts have been made to overcome the fracking complaints. The BP oil spill had many after effects for the entire industry. The firm had to a large cost for its cleanup. Drilling contractors and oil service companies were most affected. Fracking complaints are not much on large scale. These complaints are mainly from individuals who are living close to drilling fields. Limitations of fracking are very easy to point which can greatly help to reduce environmental risk. Fracking companies have made efforts to reduce wastage of water which is used for recycling. Risks associated with fracking cannot be taken lightly. Oil has been converted into semi- solid layer to reduce disasters. The disaster of Exxon Valdez has been responded in a positive manner by the industry.
Sustainability challenges in the oil and gas industry are the most burning issue nowadays. Oil and gas industry sustainability issue is not challenged all of sudden, it is the prime concern since long. Challenges of it are in various arena’s for instance protecting the environment, ecological balance, health issues and safeguard for human rights. These are the major concerns regarding sustainability challenges in oil and gas industry. One of the key challenges in it is the environmental issue because the cases of oil and gas disaster continuously haunting its existence. The aftermath of these hazards is severely divesting. Risks evolved in oil and gas industry is to maintain our ecosystem. Without damaging environmental balance oil and gas can't run and this is the main source of energy, but some safety steps, methods, and remedies taken to overcome this destruction. Actually, in the context of the environment, pollution is the major dangerous consequence. The impact of pollution in not obsessed only with a single factor, it leads to air pollution that causes infectious diseases like asthma and other breathing problem and solid or liquid waste, mining, drilling that causes land degradation. Harmful gases emitted during the process of refining left serious drawbacks of oil and gas industry. Now it reflects that oil and gas industry is surrounded with full of challenges and how its sustainability remains at its level.
The whole process of oil and gas industry formation is challenging from head to foot it confronts risks and challenges. The only way to achieve sustainable development is to reduce the risk that evolved in it. The release of air contaminants in the environment affects the atmosphere which further leads greenhouse effect and global warming. Greenhouse gas is the reason behind the melting of ice and snow in Polar Regions. In gas industry major risk involved is leakage and in gas industry refinery explosion which may cause very serious and havoc disaster. Harmful toxic substances released during the process of drilling left radioactive substances from mud over the land. The hydraulic fracturing of the top layer of land for the origin of oil and gas formation is also an activity of releasing harmful gases and substances; in fact fracking relinquishes methane gas. Methane gas impact is so much potent that its radiation is 20 times effective than carbon emission. Risk evolved with the sustainability of oil and gas industry is an operational risk and geographic risk. Because of all above-mentioned risks concerned with oil and gas industry many safety measures are taken which somehow reduce their impact on social and environmental life.
Finest measure in boil down the challenges in oil and gas industry is ethical leadership and another one is voluntary sustainability. Avoiding ethical risk is not a thing of entertaining because company's reputation and holding power totally depend on its safety measures taken and responsibility to reduce risk. Oil and gas industry both act as a boon and bad for society. The challenges and formation in oil and gas industry go hand in hand and they have to keep the balance between them.
Managing ethical risk in the oil and gas industry to reduce accidents
The ethical risk is the philosophical study of risk. If is taken on or before the time it would be very beneficial for oil and gas industry. Ethical risk management clearly differentiates between the right and wrong morals of risk without affecting personal harm. If the risk is not reduced on time then it may lead the company towards serious drawback and it also becomes expensive for them to recover it after its consequences (Anis, 2015). As correctly said the cure is better than its consequences. Every oil and gas industry needs to understand its operational and geographical risk and its results so that they can deal with them, they also need to know risk develop in each and very process and at with every step like drilling, mining, fracturing.
Management with such matter required long and proper training and huge skilled mankind efforts to understand all type of social responsibilities associated with it because the main task of such industries is to take care of the human safeguards (Anis, 2015). The most severe condition occurs when they failed to do so because it is their prime duty to duly complete it. A number of challenges occur in oil and gas industry risk management (Anis, 2015). These types of industries can’t ignore such harmful implications because it gives negative feedback to them. They should maintain strategic process for it like
1. How many policies are required in it?
2. Which policy would be effective?
3. What is the major accident strategy?
4. Which practices duly required to them?
5. Which emergency need high alert?
Dealing with above questions may push them towards their ethical risk management. There are some common factors which happened in every oil and gas industry that involved high risk and it becomes easier for other such industry to ignore them (Anis, 2015). Some of them are:-
1. Sensitivity to operations
2. Preoccupation with failure
3. Commitment to resilience
4. Valuing Expertise
5. Reluctance to simplify
Major key components associated within ethical risk accident management
1. Monitor and review
2. Identify risk
3. Set policy and criteria
4. Develop appropriate response
5. Establish risk and management methodology
6. Review and verify adequacy of controls
7. Assess risk
In most of the industries, corporate social responsibility called by people (since, 2010). CSR is very common in the corporate world. Companies success highly depends on risk reduction management. It set the benchmark for other oil and gas industry and set a good level of completion among them. Most of the companies only concerned with the accidents occur in oil and gas industry but they should also concerned with the aftermath, the results it will leave behind after its havoc destruction (Anis, 2015). If an oil and gas company is known by its all outcome of accident and risk then they can effectively manage the ethical risk.
2.Compare the risks that BP, Exxon, and the fracking industry continue to face in providing an adequate supply of energy.
BP, Exxon, and the fracking industry all of them face similar risks in providing an adequate supply of energy. The main risks, which they face, are leaks, spills, and explosions. Some other risks, which they face in providing an adequate supply of energy, are: -
Political risk- Politics affects the fracking industry as it involves a range of rules and regulations set by the government as to when and how the extraction is to be done. This risk also booms when these organizations are working on the depots overseas (Friend and Thinphanga, 2016).
Geological risk- This risk refers to the hardness in extraction and the chances of accessible reserves in depots will always be less than imagined. Geologists estimate reserves by using the words "proof," "probability" and "possibility" to just show the level of consideration, as they are never confirmed (Friend and Thinphanga, 2016).
Price risk- The rates of petroleum is the basic factor in concluding whether a depot is in the budgetary terms. The more the barriers to ease of production, the more the risk. Oil and gas companies automatically close a project that is generating losses. These refineries cannot be easily shut and restart. Hence, the fracking industry just estimates the prevailing prices over the term of their ongoing project to decide whether to begin or close. Once a project has started, price risk is a basic companion (Friend and Thinphanga, 2016).
Supply and demand risks-These risks are the real risks of every sector even for the fracking industry too. These operations involve a huge investment and take the time to get going. It is not easy to determine the prices that whether they will rise or fall.
Cost risks- It is the largest risk factor of all. The difficult the production the regulation and the more difficult the practice, the more expensive a project becomes. Even we can consider the prices that are ascertained as the work is going on in overseas countries as well (Tcvetkov and Strizhenok, 2016). Most of the organizations face trouble to retain their employees which help them in the time when markets are bullish so increase in wages and salaries can add huge costs in the operations with fewer competitors every time.
Leaks-It is a major risk for the fracking industry as leaks affect the environment and create hazards for the living beings too. The gas, which comes out in leaks, can cause radiations in the environment and can create a huge calamity and kill many living beings. It is the safety measure, which these companies have to take care of (Tcvetkov and Strizhenok, 2016). Leaks are of different grades. Grade I, Grade II and Grade III.
Spills-It is a huge risk in the adequate supply of oil and gas as when a spill occurs all marine life and vegetation is affected. It creates a lot of problem as the company becomes a news headline and has to answer the media as to what led to spillage of oil and because of this the company lacks in the supply of oil and gas and also faces the problem of the market as if the spillage happens the company will fail in meeting the demands of oil and gas worldwide and will face huge losses and a backdrop from its competitors (Tcvetkov and Strizhenok, 2016).
Explosions- It is a very sensitive matter when an oil and gas company faces explosions as it causes the loss of human life and of money too as all the investment is beheaded and the people who die and suffer injuries are also a matter of concern as it may cause distrust and discrepancies among the workers and the public. Explosions also affect the environment and because of this, the company fails to supply the adequate amount of oil and gas to meet the need in the society and market and faces huge problems and losses to recover.
3. In what ways ethical leadership helps the oil and gas industry managing the risk.
Every company of oil and gas industry needs an ethical leader to maintain their risk management issue. Its ethical leader duty to tackle the long-term consequences over such issues, they tackle with all benefits, results and all (Conner, 2015). The leader is serving as hero or role model for its company and the leader who grabs its main component is deserved to be this. They actually set their goals which they meet them on correct and required time and only they can do this.
Other employees and leader follow them, their rules because they really deal with the big issue, other leaders follows the ethical leader so that they make out their work with full efficiency (Conner, 2015). An ethical leader takes responsibility on their shoulder and takes care of each and every individual because all are equal for them ( Mihelic, et.al, 2010).
Ethical leadership required well behavior nature, highly skilled, highly trained, trustworthy, demonstrating and courageous. Ethical leaders deal with the relevant issues and executing part. Ethical leaders have their ethics to deal with their part they are very well known by the morality of right and wrong. They have a great personality and an active mind and this what above information is all about (Rogers, et. al., 2012). They have a character of appreciation because they work on the principle of the philosophy of ethics as ethics word derived from Greek which means character. Actually, they work according to the organization with its principles and frameworks that remain bounded within the organization. Their leadership quality makes a smooth path between them and their follower because they work unconditionally for their organization (Rogers, et. al., 2012). They work on value based thing and principles which they call them their ethics.
They are very well known for all the conditions in oil and gas industry, from process to find, they attentive with all the destruction and disasters which make them idle. They act as powerful and healing human in their organization (Rogers, et. al., 2012).
Being an ethical leader of oil and gas industry is about to work fairly, to think for the welfare of others, to respect each and everyone thought given by them in reducing ethical risk in oil and gas industry. They work so smoothly that it looks like that they plays their role of leadership in a very clean and proper manner (Mihelic, et., al., 2010). And this so true that without them oil and gas industry would not be able to sort out ethical risk in oil and gas industry. They really behaved like a gentleman in their role, they perform their work in such a manner that enhance their role more from earlier and it makes their personality more attractive. Ethical leadership is the most difficult job in any oil and gas industry because they have the most vital responsibility of oil and gas industry which they played with full concentration and honesty (Mihelic, et., al., 2010). Every oil and gas industry required an ethical leader in their company or organization without them they can't think their company to pursue their process. Ethical leaders act as a role model for any gas and oil industry.
If we want to develop an organization which has an ethical culture then our stakeholders will have to carefully focus on the examination of risks. We have seen that in the case of oil and gas industry there are many companies which have failed to adopt safety measures which are important to protect the workers who are working in their organization, local communities, and suppliers. After the Exxon Valdez disaster, people should be made aware through every possible source about the risks which are associated with the offshore drilling and it should be made compulsory for every organization to implement every possible safety measure which is necessary to protect the environment from the risks of disasters. Yet BP was still found to assume that such disasters are not likely to happen to them if they did not have previous safety issues at the firm. Just like in Exxon Valdez disaster, BP did not implement safety measures that could have prevented the occurrence of a disaster or the scope of disaster could have lessened.
The culture of risk taking in corporate or such big organizations should be put to end. As such risks put a question on such organization and affect their reputation in a negative manner. This will require leadership which is ethical and compliance programs that can reach all the employees in the organization. Employees of the organization should be trained and properly educated that it is their duty and they are held responsible for displaying their leadership so that misconduct can be avoided which are the main cause for creating accidents. Although in oil and gas industry there are some risks which cannot be avoided firms can adopt safety measures and timely improve them and also can make contingency plans to prevent the wrong happenings from the disaster. Many incidents occur only when risks are present and the organization fails to observe the ethical rules, codes, procedures and policies .the companies which are companies which are involved in cost effective field of fracking should learn from their predecessors that how to create a culture that will make safety and environmental consideration their foremost priority at the time of drilling process. it is now the responsibility of the industry to provide guidelines related to safety and responsibility. Oil and gas industry reputation is now solely dependent on how it is able to develop a socially transferable approach and management of stakeholders. Thus ethical culture organization is better it can prevent disasters to happen and moreover there will be no loss.
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