Alaska Dispatch News | 16 February 2016

Army Corps Launches Review of Proposed North Slope Oil Project

A federal agency is launching an environmental review of plans by the Spanish oil company Repsol to develop what may be one of Alaska’s biggest oil discoveries in years.

The US Army Corps of Engineers announced it will prepare an environmental impact statement associated with the Nanushuk project on the North Slope, near the village of Nuiqsut, that the oil company estimates could yield 120,000 B/D.

Plenty of questions surround the proposal, including when, or if, Armstrong Oil and Gas, a privately held company from Denver, will take over majority ownership and operation, said Lanston Chinn, chief executive of the village’s Native corporation, Kuukpik.

The companies announced restructuring in October that would make Repsol the minority owner. The change is expected to be completed this summer, said Jan Sieving, Repsol’s vice president of public affairs in North America.

Kuukpik owns land in the area and could benefit economically from development. But the corporation, which asked for the environmental impact statement, does not like the project so far, Chinn said.

He said the corporation is concerned that a small company like Armstrong won’t have the capital to properly develop the area. Kuukpik will be watching warily to make sure things such as gravel roads and pipelines don’t threaten subsistence hunting and the environment, he said.

“Subsistence resources and the subsistence lifestyle have to be protected to our liking for oil and gas development to move forward,” Chinn said.

Sieving said Repsol fully supports the Corps’ decision to review the proposal. She said Repsol will continue working closely with the village and regulatory agencies.

“We are committed to environmental and subsistence protections,” she said.

The Corps decided in October that the project could significantly affect the human and natural environment, leading to the review, said Ryan Winn, north section chief for the US Army Corps regulatory division in Alaska.

EHS Today | 15 January 2016

Creating Value: How Occupational Health and Safety Is Being Integrated Into Financial Reporting and Why You Should Care

Terms like “sustainability” and “corporate social responsibility” are not new. They’ve been around for 20 years or more. What is new is the financial investment community’s recognition of the value of collecting and reporting material nonfinancial information as part of the measurement of organizational value.

More and more, corporations are recognizing that material nonfinancial information is important to investors and analysts. While they may have declined to participate in sustainability reporting a few years ago, corporations are discovering that the long-term viability of their operations is being judged not only on profitability, but on nonfinancial factors as well. This means that a growing number of organizations are including occupational safety and health data in “integrated” reports that include financial and nonfinancial information.

This means that a career- and practice-changing opportunity is presenting itself to occupational safety and health professionals, says Kathy Seabrook, chairperson of the Center for Safety and Health Sustainability, which just released the report “The Accounting Revolution and the New Sustainability: Implications for the OHS Professional.”

“Safety and health professionals don’t have a clue, don’t understand their leadership role in their company’s enterprise risk management,” Seabrook said in an interview.

The new report by the Center for Safety and Health Sustainability claims that integrated reports on performance tell a business’ stakeholders of its ability to create value in a sustainable way and feature data on a range of nonfinancial matters. This means that “human capital” issues such as the mental and physical health of the workforce and employee engagement are considered material to a company’s performance, just like balance sheets and statements of cash flow.

Rigzone | 22 December 2015

Column: Fixing Oil’s PR Problem—What Consumers Believe vs. Reality

If you spent a few hours stopping people on the street and asking whether they like the oil industry, chances are you would not find many folks who are huge fans. A recent Gallup poll confirms this with numbers showing that the majority of Americans either dislike or have no feelings about the oil industry; only 34% feel positively about it.

What’s more, that 34% is actually a huge improvement over years past. Previous polls have shown the industry struggling even more to gain public approval. In 2012, another Gallup poll showed that Americans hate oil companies more than the federal government.

So why do Americans feel so negatively about the oil industry?

Digging deeper, there seem to be three catching points that keep the public from feeling good about the oil companies. Here’s a closer look at what the public believes, what is actually true, and how the two can be reconciled moving forward.

Corporate Social Responsibility and the Law | 12 November 2015

World Exchanges Encouraged To Report Indicators of Long-Term Sustainability

On 4 November, the World Federation of Exchanges (WFE) released a set of 34 sustainability measures that include environmental, social, and governance indicators. WFE recommends that its member exchanges implement these indicators into the disclosure requirements for listed companies.

The WFE is an industry trade organization made up of 99 organizational members, including 64 regulated exchanges (e.g., NASDAQ and NYSE) across the globe. More than 44,000 companies list on WFE exchanges. It acts to establish standards for publicly regulated securities markets and to ensure good international corporate governance.

WFE recommends reporting indicators such as ratios of CEO to median pay and male to female pay; employee turnover; workforce and board gender diversity; injuries; greenhouse gas emissions; water and waste management; child and forced labor; corruption and anti-bribery; and tax transparency. It also provides advice on how to roll out these new reporting metrics.

The guidance, while voluntary, could lead to greater corporate transparency and listed companies would benefit by attracting more long-term investors and identifying opportunities to save costs and lower risk. Long-term sustainability has gained traction in financial markets recently, particularly as institutional leaders warn that issues such a climate change will lead to financial crisis unless the private sector and its regulators do more to ensure transparency regarding current and future carbon emissions.

Penn Live | 29 October 2015

Energy Capital of the East: Marcellus Shale Drilling Brings Economic Boost

From design to drilling to environmental engineering to the supply chain, Marcellus Shale development is responsible for hundreds of thousands of jobs in Pennsylvania—including thousands in the midstate, according to the state Department of Labor & Industry.

It’s an outcome that former Gov. Tom Corbett likes to talk about in an industry he sees as marking his legacy.

“You go up into the Williamsport area, you see the sudden growth from what had been there years and decades before,” he said. “Go to Washington County and go to Southpointe and see all the buildings that are there from the energy industry.”

Indeed, Southpointe has changed. The office park in Cecil Township, which is about 20 miles south of Pittsburgh, was once known for its pharmaceutical and technology companies and the ice rink where the Pittsburgh Penguins practiced.

Now, it is home to 150 businesses, including several large energy companies: Chesapeake Energy, Columbia Gas, Consol Energy, Halliburton, Noble Energy, Range Resources, and Rice Energy.

Stikeman Elliott via Mondaq | 13 October 2015

Column: One Size Does Not Fit All—Changing Approaches Toward Aboriginal Engagement

Attaining an aboriginal community’s consent to a development project should not be viewed as a line item on a to-do list. Corporations that want to operate successfully in areas subject to aboriginal interests, therefore, must find new ways of building or rebuilding relationships, and the first step is developing mutual trust.

The Boreal Leadership Council (BLC), a working group of conservation organizations, indigenous peoples, resource companies, and financial institutions, has developed a framework through which industry and government can engage indigenous communities. The BLC has asked industry and government to implement the idea of free, prior, and informed consent (FPIC)—the right of indigenous peoples to offer or withhold consent to developments that may have an effect on their territories or resources—in other words, a veto power over resource development projects. FPIC cannot exist where a people does not have the option to meaningfully withhold consent.

The BLC—whose members include Suncor Energy, TD Bank, and Tembec—has concluded that fears of “arming” indigenous leaders with a veto power are misguided. The BLC believes that adopting FPIC would serve to facilitate partnerships and not create a barrier to development. In essence, FPIC is the most meaningful olive branch that can be offered by industry and government; it is a tangible step down the path toward true partnership.

Houston Chronicle | 8 October 2015

Proposals for Local Input on Oil, Gas Locations Under Fire

Colorado state regulators have released proposed rules to give local governments more of a say in the location of new oil and gas wells, and they quickly came under fire from the energy industry and environmental groups.

The Colorado Oil and Gas Conservation Commission is drawing up the rules to implement the recommendations of a task force convened by Gov. John Hickenlooper.

The governor asked the group to address tensions over hydraulic fracturing and conflicts that arise when cities and oilfields expand into each other.

The task force recommended, among other things, that local governments be given a consulting role when energy companies are deciding where to locate large oil and gas facilities if they’re near homes or businesses. Cities and counties would not be able to enforce their own rules, however.

Regulators released the first draft of the rules on 6 October and scheduled public hearings for 16–17 November.

Rigzone | 17 September 2015

Oil, Gas Works on Solution To Reduce Freshwater Use in Fracturing

While the quantity of water used for hydraulic fracturing increases, essentially with each new well put into production, industry researchers are developing ways to diminish the quality of that water—eliminating freshwater from the solution.

More and more companies are doing their part to lessen their impact on drinking water. In fact, some experts estimate that hydraulic fracturing could be free of freshwater production by the end of this decade.

Many wells, especially those in the Marcellus, still rely on millions of gallons of water—and that’s per well in some cases, Doug Kepler, vice president of environmental engineering at Seneca Resources in Houston, said. But each year more and more of that water is nonpotable water that would not be part of the drinking water supply.

Osler, Hoskin, and Harcourt via Mondaq | 11 September 2015

Quebec Adopts New Transparency Measures in Mining, Oil and Gas Industries

On 11 June 2015, the Quebec National Assembly introduced Bill 55—an act respecting transparency measures in the mining, oil and gas industries (Bill 55), in view of imposing transparency measures in the mining, oil and gas industries. These transparency measures, the bill states, are meant to discourage and detect corruption, as well as foster the social acceptability of natural resource exploration and development projects.

Under Bill 55, the concerned entities will have to file an annual statement to the Autorité des marchés financiers declaring all payments of more than CAD 100,000 made to a government, a government entity, and a native nation. The statement would be made public by the concerned entities for a period of 5 years. This includes taxes, royalties, fees, production entitlements, dividends, bonuses, contributions for infrastructure construction or any other type of payment determined by regulation. Payments made to native nations, however, would benefit from a 2-year exemption and would only need to be reported from June 2017.

Rigzone | 24 August 2015

Spend More To Save More? CSR Programs Can Save Operators Millions

It is likely one of the last things on the minds of petroleum companies these days as they work to stay afloat amid falling oil prices.

However, investing socially in the communities where they operate practically guarantees profits in the long run and is a relatively low-cost measure to take during an economic downturn, said Jim Sisco, president and founder of ENODO Global, a consulting firm specializing in risk analysis and population-centric engagement.

Social investments can include improving education, infrastructure, health care, and job training for locals.

“As companies attempt to identify ways to save money, such as reducing operating costs and eliminating staff, they will have to identify new solutions or creative ways to save,” Sisco said.

One of those ways, known as corporate social responsibility (CSR), is to help meet the basic needs of communities—primarily in emerging countries—which, in turn, can substantially lower security costs.

“Companies that are able to design and develop good community engagement programs are more profitable because they face less negative impacts from strikes, attacks, and sabotage, which could impact them by millions of dollars,” Sisco said. “That’s the bottom line.”


Orrick | 14 August 2015

Column: Secret Recipes—Fracturing Fluid Fracas

As today’s method of hydraulic fracturing combined with horizontal drilling in shale formations rose to prominence in recent years, so too did the public’s concern over chemicals contained within fracturing fluid. Even before the existence of state mandatory disclosure laws, like the one enacted in Wyoming in 2010, there was a fair amount of general information publicly available about the composition of hydraulic fracturing fluid. However, much information remains confidential as trade secrets.

But what exactly is hydraulic fracturing fluid anyway? The hydraulic fracturing fluid used today consists of three types of ingredients: a “base fluid” (usually water), small solid particles (often sand) called “proppants,” and a cocktail of various chemical additives that help to make a fracture more successful and more productive. Typically, the base fluid and the proppants together comprise approximately 99% of the fracturing fluid. So, it is really only this last 1% of fracturing fluid composition (i.e., the cocktail of chemical additives) that has been the subject of recent controversy.

Over the past decade, public support has grown substantially for regulations that would require companies to disclose their fracturing fluid ingredients. As hydraulic fracturing became more common and widespread, some people began to worry that fracturing fluids could find their way into groundwater. In response, many people began to ask questions about what was contained within fracturing fluid, and, although there was already significant information available to the public, many companies balked at the idea of revealing the specific contents of fluid recipes that they had spent considerable sums of money to develop.

It was only a matter of time before state legislatures responded to the public concern for disclosure.