Reference no: EM133330196

Assignment:

Case: Sustainable Development and the Oil Industry

Since the publication in 1987 of the report by the World Commission on Environment and Development (known as the Brundtland report, which introduced the phrase "sustainable development" to our lexicon), many governments, business. es, and environmental groups have argued that economic development can only be ethical if it is sustainable and ensures that future generations are no worse off as a result of the way finite natural resources are being used today. Many enter. prises have begun to modify their operations in order to meet this standard, But the question arises: How can the petroleum industry meet such standards when it involves using up a non-renewable natural resource that is linked to potentially devastating climate change?

It should be noted that a widely reported study in the February 2012 issue of the journal Nature ("The Alberta Oil Sands and Climate" by Canadian professors Andrew Weaver and Neil Swart) pointed to coal as the greatest threat to climate stability, a finding that was quickly interpreted by many as a confirmation that the oil sands were "not so bad after all? However, Weaver and Swart's study made clear that this was a matter of degree; though less damaging than coal, the oil sands were still a significant contributor to the larger problem of climate change.

One traditional way of addressing some would say putting off- the problem of sustainable development has been to step up efforts to develop biofuels and to explore for and extract energy from sources of oil and gas in offshore deposits and in shale and tar sands (this option has become more difficult to pursue because the number of oil and gas deposits that are easily accessible is dwindling, and most newly discovered sources are increasingly expensive to exploit). Others have argued that the petroleum industry needs to work much harder to conserve the oil and gas it extracts from the earth. It can stop flaring (the controlled burning of natural gas) and find uses for otherwise unused associated gases.

It can work to make sure that its products are used efficiently. It can champion the use of smaller motors, lighter cars, and more efficient furnaces. It can explore more efficient ways of utilizing petroleum byproducts in the chemical and plastic in-dustries, including more accessible and more easily operated recycling centres for plastics. It can improve its efforts to reduce the amount of petroleum wasted during extraction, transmission, and refining.

Questions: What else can and should the petroleum industry do? To what extent should it be exploring and promoting alternative sources of energy? Petroleum firms are increasingly becoming involved in alternative energy sources, and are now identifying themselves more broadly as "energy companies." But are they doing enough?

To the degree that it is exhausting a non-renewable source of wealth in particular areas, should the oil industry be obligated to help create and protect other sources of wealth (in the forms of human and social capital: What actionss just and fair? What would you recommend? Why?

The following questions will require some additional research:

To what extent has the use of biofuels adversely affected food prices, and how will this affect consumers? Should the oil industry encourage and/or accept rigorous carbon taxes, designed both to reduce consumption and foster greater eficiency in the use of this non-renewable resource?