Oil industry must be proactive not reactive when it comes to CSR

One would think that an integral piece of corporate social responsibility would be to display a proactive approach to internal affairs which concern safety and the environment. As I’ve written before the oil and gas industry has both higher inherent risks than most sectors of business combined with a track record of incidents that have left public confidence teetering on the edge of despair. With such scrutiny being placed on the industry after a number of incidents the most glaring example being the BP disaster in the Gulf of Mexico it would seem natural that companies in the oil industry would be internally policing their own safety standards at higher levels than ever before, but it doesn’t seem to be the case.

I don’t think that today’s story should raise the idea that TransCanada Corporation are any less responsible than so many of it’s competitors, simply that the problem seems to be endemic to the industry in the high stakes battle for oil profit. Not fixing a problem until external legislation and regulation forces it to be addressed doesn’t reflect a culture of corporate responsibility but a culture of complacency.

TransCanada make the headlines this week as the US Department of Transportation has ordered the corporation to suspend operation of their Keystone 1 pipeline after a number of recent spills. They are all recent as the pipeline which brings oil from the oil sands region of Alberta to the US. Two leaks occurred during May at pump station pipe fittings. My question is quite simple, why didn’t the company take the precaution to close the pipeline in the interests of safety themselves before the order was made. A smaller version of the same question resulting from the BP inquiry which showed existing flaws in practices and equipment. The agency statement expressed:

“Effective immediately, this order prevents TransCanada from restarting operations on their Keystone crude oil pipeline until P.H.M.S.A. is satisfied with the ongoing repairs and is confident that all immediate safety concerns have been addressed”

Map reflecting current and proposed TransCanada pipelines

The company have also applied to build the Keystone XL which will be a much larger pipeline transporting oil south to the Gulf of Mexico underneath key agricultural regions of both Canada and the US. Evaluation of this new project must be in advance of its construction and implementation not after the fact, corporate responsibility isn’t the art of reacting but planning and forecasting. There are major technical considerations for the new and existing pipelines also as tar sands oil is more corrosive than other oil routinely piped and is pumped at higher pressure and temperatures. The largest of the two recent leaks resulted in 10,000 gallons of oil being released into the environment.

From an environmental perspective the list of reasons that new oil development in offshore rigs, the arctic and the tar sands region are all questionable decisions – decisions which are being made with the economic demand and potential offsetting the extraction. Surely however, the oil industry must collectively stand up and show a dedication to safety and proactive measures that demonstrate a commitment to being responsible, professional and safe. I’d hate to revisit this topic in five years and say that the writing was on the wall.

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