12
2 The Study Context
discovered and used, since 1861. Currently, fossil crudes and their derivatives are
the main drivers of modern economies and societies.
Since the past decade, O&G consumption and production have reached record
levels (BP, 2014, 2017, 2019). According to British Petroleum (BP), BP Statistical
Review of World Energy (BP, 2014), Oil has been the world’s leading fuel, representing 32.9% of the total global energy consumption. In 2016, its use grew above
1.6% the historical average, in an impressive mark of an additional 1.6 million barrels
per day. Oil worldwide production grew by 0.4 million barrels per day in 2016 and
did not keep up with the pace of global consumption. In fact, oil global production
increased by less than half of the rate of global consumption growth (BP, 2017). In
2018, oil consumption grew above-average, at 1.4 million barrels per day, with China
and the USA being the biggest O&G consumers (BP, 2019).
Natural gas is the second most utilised fossil fuel. Natural gas consumption oscillated around 1.5% consumption growth in 2016. Global production grew by 0.3%,
still below the historical 2.5% growth average and it increased slightly below the
global rate of global consumption. Apart from the subtle disparity between consumption and production, natural gas demands are still higher than production and have
increased over 2016 (BP, 2017).
The rising global consumption of oil crudes is evident, as well as its limited availability. The O&G industry and its entire supply chain play an important role in many
national economies (Kumar et al., 2011; Szklo & Schaeffer, 2006; Szklo, Machado,
Schaeffer, Felipe Simoes, & Barboza Mariano, 2006). However, the total known
global O&G reserves are only sufficient to meet the next 50 years of global production (BP, 2014). Given the current demand for O&G, a growing global population,
expanding economies and increasing energy demands, it seems likely that for the
next 50 years modern society will still produce and consume fossil crudes (Kumar
et al., 2011).
On the other hand, several countries, such as Denmark (Lund & Mathiesen, 2009),
Germany (Bergek, Hekkert, & Jacobsson, 2008; Strunz, Gawel, & Lehmann, 2016),
the Netherlands (Kern & Smith, 2008) and New Zealand (Roy, 2018) have enacted
policies aimed at shifting their main energy consumption from fossil crudes to alternative renewable resources. This indicates that the lifespan of the O&G sector, and
therefore of O&G social investment, may be limited to the next 10–50 years. However,
given the likelihood that a full transition to renewables will not take place immediately, for the foreseeable future, it will still be important to address the impacts
created by O&G activities.
O&G Exploration and Production activities create two types of impacts locally:
social and environmental impacts. According to McPhail and Davy (1998, p. 7), while
environmental impacts are more successfully addressed by engineering solutions and
can be closely tracked by environmental assessment, the negative social impacts—
which influence and affect host communities’ cultural and natural resources—are
“more difficult to manage and resolve”.
Some of the social and environmental impacts have been acknowledged and investigated. Examples include the impacts associated with oil pipelines in Sudan operated
by China in 1998 and 1999, the Shell Nigeria operations between 1958 and 1997
2 The Study Context
discovered and used, since 1861. Currently, fossil crudes and their derivatives are
the main drivers of modern economies and societies.
Since the past decade, O&G consumption and production have reached record
levels (BP, 2014, 2017, 2019). According to British Petroleum (BP), BP Statistical
Review of World Energy (BP, 2014), Oil has been the world’s leading fuel, representing 32.9% of the total global energy consumption. In 2016, its use grew above
1.6% the historical average, in an impressive mark of an additional 1.6 million barrels
per day. Oil worldwide production grew by 0.4 million barrels per day in 2016 and
did not keep up with the pace of global consumption. In fact, oil global production
increased by less than half of the rate of global consumption growth (BP, 2017). In
2018, oil consumption grew above-average, at 1.4 million barrels per day, with China
and the USA being the biggest O&G consumers (BP, 2019).
Natural gas is the second most utilised fossil fuel. Natural gas consumption oscillated around 1.5% consumption growth in 2016. Global production grew by 0.3%,
still below the historical 2.5% growth average and it increased slightly below the
global rate of global consumption. Apart from the subtle disparity between consumption and production, natural gas demands are still higher than production and have
increased over 2016 (BP, 2017).
The rising global consumption of oil crudes is evident, as well as its limited availability. The O&G industry and its entire supply chain play an important role in many
national economies (Kumar et al., 2011; Szklo & Schaeffer, 2006; Szklo, Machado,
Schaeffer, Felipe Simoes, & Barboza Mariano, 2006). However, the total known
global O&G reserves are only sufficient to meet the next 50 years of global production (BP, 2014). Given the current demand for O&G, a growing global population,
expanding economies and increasing energy demands, it seems likely that for the
next 50 years modern society will still produce and consume fossil crudes (Kumar
et al., 2011).
On the other hand, several countries, such as Denmark (Lund & Mathiesen, 2009),
Germany (Bergek, Hekkert, & Jacobsson, 2008; Strunz, Gawel, & Lehmann, 2016),
the Netherlands (Kern & Smith, 2008) and New Zealand (Roy, 2018) have enacted
policies aimed at shifting their main energy consumption from fossil crudes to alternative renewable resources. This indicates that the lifespan of the O&G sector, and
therefore of O&G social investment, may be limited to the next 10–50 years. However,
given the likelihood that a full transition to renewables will not take place immediately, for the foreseeable future, it will still be important to address the impacts
created by O&G activities.
O&G Exploration and Production activities create two types of impacts locally:
social and environmental impacts. According to McPhail and Davy (1998, p. 7), while
environmental impacts are more successfully addressed by engineering solutions and
can be closely tracked by environmental assessment, the negative social impacts—
which influence and affect host communities’ cultural and natural resources—are
“more difficult to manage and resolve”.
Some of the social and environmental impacts have been acknowledged and investigated. Examples include the impacts associated with oil pipelines in Sudan operated
by China in 1998 and 1999, the Shell Nigeria operations between 1958 and 1997