There’s no denying the fact that the oil industry is an important contributor in building world economy. Ever since oil was discovered it has worked both for and against us. In earlier times, oil was available in plenty and its uses included generating heat and light. In modern times, oil is being used mostly as fuel for powering our transportation systems. It has also become an indispensable source of energy creation and is used in manufacturing day to day consumer durables such as toothpaste, contact lenses, credit cards, golf balls, polystyrene cups, and plastic bags and so on.
Every silver lining has a hidden dark cloud behind it. In the same way, oil too comes with a price tag – global warming and other environmental issues. Global warming is a direct result of greenhouses gases that are trapped in the earth’s atmosphere. The carbon dioxide and carbon monoxide that are produced by burning of oil, gas and coal pose a very serious threat to our environment and life on earth in general.
Some effects of global warming that we have been witnessing for a few years now are fluctuating and extreme weather conditions, melting of the polar ice caps, depletion of the ozone layer, and increasing droughts, floods and storms around the world. However, the good news is that society is becoming increasingly aware of the fact that there needs to be a change in the way we produce and consume energy.
Every action has an equal and opposite reaction. Just as the activities of the oil industry are affecting the climate, the climatic changes too have started affecting the oil industry. In this post, we look at the impact that the changing climate has been having on the industry and what it could mean for the future.
Impact on Water Resources
One of the most noticeable and significant results of global warming has been an increase in droughts, water shortage, water pollution and flooding which has led to worsening quality of water, rendering it pretty much useless to people. Sharing of water resources among different countries can cause friction between them in the long term which could spell doom for companies that depend on water for the production of oil and gas. The trouble is that not many companies are taking this impact seriously and some of them do not even acknowledge the risks their company’s activities put the biosphere and human society to.
Impact on Machines and Equipment
A lot of the currently existing factories and their machinery and equipment date back to decades ago. These were built and assembled as per the environmental conditions in that period and may not be prepared to endure the changing climatic conditions in the present and future. As the climate fluctuates frequently and results in unseasonal rains, extreme heat and cold conditions, it can greatly affect the technology which is still in use in most of the plants. That has a domino effect as the changing weather can affect the functioning of these physical assets and the factories infrastructure - be it the huge production machines or even something as seemingly trivial as steel pipes. Some of the other direct effects of this include transport disruption, damaged buildings and increased operational delays and costs.
Impact on Employee Safety
Unpredictable weather conditions and being around physical assets that are unable to withstand the volatility of the climate can result in unsafe working conditions (especially for offshore workers) for the employees. The question is whether oil companies realize this and have factored this into their risk management and assessment measures and if they are equipped enough to create a safe working environment to protect the health and safety of the employees.
Impact on Company’s Finances
Oil industry is in constant requirement of capital to fund its oil exploration ventures. Similarly, they also need to obtain investments for production and manufacturing so that they are able to cope with the ever increasing demand for energy. Investors would definitely be interested in the implications of the changing climatic conditions and what that could mean for their investment. The company could possibly end up spending more on covering insurance costs due to the danger of damage to the plant’s infrastructure and physical assets. This could have severe implications on the company’s finances due to the variation in the value of reserves and the plant as a whole.
Impact on Company’s Reputation
Thanks to information explosion, today an increasing number of people are growing aware of the climate changes and exhaustion of non-renewable energy sources and its impact on the environment and society. As people become conscious of oil companies that flout environmental norms and fail to keep a check on their emissions, it is becoming important for them to keep a watch on their activities that contribute to environmental damage, at least for the sake of maintaining a clean reputation.
The effects of global warming can be felt all over the world and it has become difficult for weather monitoring systems to accurately predict as to what is to come. As guidelines, policies and norms and released and amended from time to time, companies continue to ignore them to generate maximum financial gains. Industrialization cannot be stopped as it is required for global economy to function, but care needs to be taken to save the environment before it is too late.
This is the official online community site of the Emerson Global Users Exchange, a forum for the free exchange of non-proprietary information among the global user community of all Emerson Automation Solution's products and services. Our goal is to improve the efficiency and use of automation systems and solutions employed at members’ facilities by sharing our knowledge, experiences, and application information.
User Groups |
World Areas |
Community Guidelines |
Legal Information |
Contact Community Manager
Website translation provided by
© 2015-2020 Emerson Global Users Exchange. All rights reserved.