Processing Magazine

Climate change exposes the oil and gas industry to risk

November 3, 2009
In a new Acclimatize report, over three quarters of the world''s oil and gas companies surveyed believe inevitable climate change could impact their business: increasing downtime, system failures and safety; but only 19 percent are taking action, according to a press release. The report titled "Global Oil & Gas - The Adaptation Challenge" is based on the Carbon Disclosure Project''s annual request for investor information that was sent to the world''s largest 128 oil and gas companies globally (based on market capitalization). Analyzed using the Acclimatization Index™ Methodology, the report identified the top five impacts of climate change and the industry implications.
Increased pressure on water resources: Concerns over changing rainfall patterns, water shortages, poor water quality, drought and flooding is significantly increasing the demand for water.
Physical asset failure:
The report revealed that many existing plants and equipment have been designed on the basis of historic climatic conditions and may not withstand changing environmental conditions.
Employee health and safety risks:
Volatile working conditions in extreme environments and physical assets, which are potentially not suitable for the changing climatic conditions, have the potential to impact the health and safety of employees.
Drop in value of financial assets:
To meet the growing demand for energy, oil and gas companies need to continue securing investment for new exploration, production and manufacturing. Potential investors and stakeholders are placing greater importance on the business impacts of climate change as the risks impact cost and revenue drivers.
Damage to corporate reputation:
As knowledge and awareness of climate change grows, any failure to monitor and report the impacts of climate change on social and ecological resources is increasingly likely to harm a company''s reputation.