The oil and gas industry has always been one that splits opinion. While there is an undeniable need to quench the world’s thirst for hydrocarbons, there is little denying that in order to do this oil and gas companies are facing an increasing number of social risks in addition to technical challenges associated with moving into harsher environments, deeper waters and frontier locations.
Alongside this, the exploration and development of alternative energy sources, particularly shale gas and oil sands, means that the oil and gas sector is becoming ever more invasive in its operations, whether that be in carrying out E&P near built up areas or near smaller communities in developing countries such as Africa, or in developing resources in sensitive or environmentally fragile locations.
The reality for oil and gas companies is that, increasingly, their social responsibilities are becoming far more important in their operations. Traditionally, the industry has never been at the forefront when it comes to social consultation or liaising with local communities. And while many of the key players in the industry are proud to boast of their environmental credentials, there are many that feel these businesses are overlooking their social licence to conduct activities.
To find out more about this aspect of the industry, and what can be done to improve our social footprint, I spoke with Hamish Wilson of SLR Consulting. A trained geologist by trade, with ten years’ E&P experience with BP, Hamish has also established and ran his own consultancy that specialised in exploration, process and performance technology. He recently joined SLR Consulting, an international environmental consultancy, as technical director tasked with developing the company’s oil and gas project portfolio worldwide. Due to his background, Hamish is onefocussing on developing an integrated service known as ‘Social Licence to Operate’.
Tell me more about the ideas behind ‘Social Licence to Operate’, and how it has developed?
What I am particularly passionate about is the way in which the oil and gas industry will need to adapt as it exploits hydrocarbons in areas of population density in developing countries. Often, these types of operations are very invasive in terms of their activities, footprint and outcome, particularly in operations such as oil sands and shale gas fracking, which often take place close to population centres. In my opinion, this has nothing to do with environmental compliance, quite simply on many occasions we do not have a social licence to operate or do the work because there are so many objections, complaints or misunderstandings among the local community. The root cause of many of these problems and objections is the lack of early consultation with the stakeholders who live in and around the hydrocarbon resource.Do you feel that this social responsibility is lacking in the oil and gas industry at present?
Yes, its something the oil and gas industry has been a little gung-ho about in the past. The way that we tend to do social consultation at present is essentially to say “we are going to drill a well here, OK?” and that really isn’t engaging with society, or going to help to appease any concerns in any way. One can’t help but note the recent fracking issue in Cumbria, where they went in and drilled the well without explaining any of the ideas or issues behind the process to the people that lived in the area and, naturally, they had serious objections about the project. It’s fairly easy to understand that this just isn’t good enough, particularly when you consider the possible outcomes of any mistakes, errors or accidents.
In your role at SLR you will be developing the ‘Social Licence to Operate’ programme, what can SLR bring to this field?
At SLR we have areas of broad environmental expertise combined with a deep sensitivity and interest in the ideas around social engagement, so it seemed completely natural to integrate these together into a single service offering under the Social Licence to Operate banner. Much of this is based on our personal experience as a business – at SLR we carry out quite a lot of work in the oil and gas industry in areas such as Alaska, where we manage the oil response operations for the Alaskan pipelines, as well as in Canada, where undertakes out a lot of site remediation work and waste management/cleanup services.
It is in these types of areas where we have really seen the idea of a social licence to be particularly apt. Take Canada for example, where we work among various first nation communities, towns and cities during our typical operations. Each of these communities or townships for example has differing outlooks and value sets for the local environmental, nature and surroundings, as well as for their own wellbeing and so it became vital to really consult and develop a way of integrating these social consultations with how one goes about managing the environmental impact. This is really the roots of the ‘Social Licence to Operate’ programme – it is about integrating your social consultation with your environmental impact studies and predictions in the most effective and society-friendly fashion.You mentioned this side of the business has been lacking within the operations of many companies, how have you seen the ideas of ‘Social Licence to Operate’ be accepted thus far?
I am finding that when we talk to many of the major oil and gas companies they tend to say to us that they already have their various social performance departments, or their HSE people, who are there to address these types of issues but in reality, and I know this from my background, many times these companies don’t even think about social consultation when they are planning their wells. I think that its almost something of an afterthought, so my mission, and our mission as an industry, is to drive this concept forward by illustrating just how important it is that companies consider their social responsibilities – quite simply, we have to bring these issues into the mainstream of the industry because they are a tangible and key risk that needs to be managed if we are to progress. Also, while many oil and gas companies do put a great deal of work into their environmental impact they must also realise that social and environmental are two different things that need to be integrated to work effectively.
What will be the main incentives behind the ‘Social Licence to Operate’ for oil companies, and how will you be working with them?
At the end of the day, the oil industry is all about cycle time reduction and reducing the risks associated with delayed projects. What we are increasingly noticing is that there is a very real social delay risk to achieving production deadlines. The industry is driven by time to money, and it is becoming more and more important to pinpoint and manage the social risks if you wish to be successful. Without these early consultations and the subsequent engaging, and even appeasing, of society where necessary there is a very real risk that a project can be delayed or even stopped with the right objections. So, it is time for the oil companies to really realise the risk associated with this and do something firm about it.
What we are advocating is a process of early engagement with society. So, as soon as you begin to embark on a drilling campaign, lets try to talk to the stakeholders and opinion leaders in the local community about how we engage the people, where we locate the wells, where we are going to build the roads, what the waste management programme will be etc. It is about giving the people the information that they need so that they are aware, and in ideal cases perfectly in agreement with what is happening.
Looking ahead, do you think this problem will increase as the industry pushes further into frontier locations?
Definitely. A key issue is the industry’s activities in developing countries, where there are a number of grey onezones in terms of how we work with society. In many cases in these environments, if you don’t correctly engage the local community it can turn into a security risk or cause things like corruption. Development in these countries has a big impact on communities and I’m not sure, at the moment, that the industry is really handling that optimally. In developing countries the social engagement philosophy is exactly the same, its all about engaging with the community in which you do your job. Its not necessarily all about building schools or hospitals, which is obviously still beneficial, I just think that we have to be a lot smarter in how we win around the local communities.
Looking at the future then, how would you like the idea of ‘Social Licence to Operate’ to develop?
Ultimately the industry is facing some increasing social challenges to its operations with society objecting to many of these new developments, and I think that this will only continue to grow. We have to face up to our responsibility and learn the importance of engaging society to achieve success in the long-term.SLR Consulting
Hamish Wilson is technical director at SLR Consulting, a leading international environmental consultancy that provides global advice and support on a wide range of strategic and site-specific issues to a diverse and growing base of business, regulatory and governmental clients in the energy, mining, renewable, hydropower and biomass sectors.
For further information please visit: www.slrconsulting.com