Elyse Collat
Energy Industry
Blog Post #2
What are key ethical issues this industry faces?
The thing about most energy companies is that if they mess up even a little bit, they can cost innocent people their lives. If energy companies cut corners, accidentally or on purpose, they can do irreversible damage to the environment. Each energy company has to determine if the worth of protecting the environment, potential health risks, etc. because in most cases these things are a tradeoff with extra profit.
Oil companies, gas companies, and nuclear power plants all have the most to worry about ethically. There has been major controversy about drilling for Oil in environmentally protected parts of Alaska. Although the government is involved in this case, usually companies have to decide on their one if they are willing to displace people from their homes or animals from their habitats when choosing where to drill or set up a plant.
Shell, for example, became one of the Nation’s most sustainable and ethical companies in 2006[1]. However, two scandals in the early 90s forced them to evaluate their morals in the public eye. In 1992, Shell’s plans to sink an oil carrier in the middle of the Atlantic ocean were discovered. Oil pollutes the ocean and harms the things that live in it and so dumping an oil covered barge is definitely frowned upon. Even if the consequences don’t immediately directly affect humans, we will still have to face them in the long term and I think this is something companies don’t worry about enough.
Worse yet, Shell’s long-term decimation by oil drilling of tribal land in Africa caused the local tribe to retaliate, resulting in a bloody mess. After these scandals outraged the public, Shell literally cleaned up its act and released a report detailing “a commitment to social responsibility that is admirable, and highly unusual from an oil company.[2]”
This is not the only time that an energy company has had to deal with brutal decision involving lives of people in other countries. Total Energy Company points of that “Unfortunately, the world’s oil and gas reserves are not necessarily located in democracies.”2 It’s reported that Total is indirectly funding the Burmese military regime, allowing the unelected dictators to maintain control of the people.
The ethical dilemmas behind the Energy Industry are complicated at best. The major problems that energy companies have to face are ones that deal with people’s well being- including where they live, the air they breath, the water they drink, the food they eat- but they also have to worry about animals and long term effects on the environment. If nuclear power plants dump toxic waste near a school, they are frowned upon and if they bury it deep in the group and it infiltrates into our water then that also is potentially fatal. However, if the nuclear power plants took all their nuclear waste to Antarctica where no one lives people would worry about penguins and other life that lives down there.
Like many ethical issues, the ones facing the energy companies are not simple but they have more extreme consequences than those of say the retail industry.
This post is really interesting because the environment is such a big topic around the world today especially with man made pollution from power plants, car exhaust, etc. I know this isn't ethical because we cannot prevent natural disasters, but with the earthquake that occurred in Japan and the nuclear reactor pollution that is occurring there there are extra steps energy providers and companies have to take in order to protect the environment around them. This is something that energy companies should really emphasize when they create their ethics codes because just one slip up can affect the world. With all the things that energy companies have to take into account in order to prevent these issues, the environment becomes a major player in energy marketing. The environment and the sensitivity to the environment is one thing that energy companies try to do in order to separate themselves from their competitors. Especially with the renewable energy movement this is becoming more and more seen. Consumer preferences these days seem to lean toward energy companies or even energy sources like wind when making purchasing decisions because it is what they feel is the best for themselves and the best for the environment.
ReplyDeleteEthical violations in the energy industry can result in detrimental consequences. The post was extremely useful because it specified the ethical dilemmas that players in the energy industry face. When we make our investment recommendations in the future, its important we analyze which companies are the most environmentally friendly. I think the energy companies that will be successful in the future are those that follow an ethical code of conduct. Protecting the environment has to be a priority in the energy industry because, as this post acknowledged, one ethical violation can create devastating affects to humanity.
ReplyDeleteYou have all touched upon several important topics when discussing the ethics of your industry. This industry is particular interesting when it comes to ethics. Their operations don't cause externalities as indirect results of their business, their every day operations directly impact the environment and its surroundings. Energy companies' code of ethics and stance on corporate social responsibility need to clearly lay out their plan to do as little damage to the environment as possible. But when you think about energy companies this may be easy, considering they may have alternatives to oil. But what about oil companies?? It's a little harder for them to say they are doing their best to protect the world when their entire business depends on the amount of oil they can extract from it.
ReplyDeleteYes. I agree with you that when a company in the energy runs into an ethical issue, people begin to concern a lot about it, regardless of it's a big or small problem. Because we have no idea of what the consequences would be. As you explained, "Even if the consequences don’t immediately directly affect humans, we will still have to face them in the long term." So, it is so important for a company to pay a lot of attention to ethical problems.
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