An Industry Perspective on
Environmental and Social Issues
in Oil and Gas Development
Case Studies from Indonesia and Ecuador
Jennifer A. Parnell
For several decades, oil and gas companies have operated in some of the world's most sensitive environments, including tundra, rain forests, coral reefs, mangroves, wetlands, and deserts. Millions of dollars have been spent by oil and gas companies to improve health care, build housing and medical facilities, enhance education and job training, and improve daily life for people in nearby communities. Recent years have been marked by strongly worded policies, innovative technologies, reduced impacts, increased corporate environmental performance reporting, stakeholder consultation, and comprehensive environmental management systems.
As exploration and production companies focus their efforts in the humid tropics—long recognized as centers for biodiversity and indigenous culture—environmental and social issues become intensified. Energy development will continue to occur in sensitive environments throughout the world, and all energy production inevitably involves some impact. The challenge for energy companies in this arena is to move beyond rhetoric, beyond the successes and failures of the recent past, and establish a new level of trust, both with the communities in which the activity occurs and with the global community.
Voluntary corporate disclosure of environmental performance and the old model of village-by-village compensation (the so-called beads and trinkets approach) have faded. It is not enough to be “seen to be green” in the humid tropics; there is a new corporate accountability. Energy companies in these regions of the world will increasingly be judged not only on technical skill and economic performance but increasingly on who we are, how we behave, and what issues we sup