Oil and Gas at Risk from Climate Change, but is the Industry Prepared?
A new Acclimatise report backed by IBM, entitled "Global Oil & Gas — The Adaptation Challenge has identified top five impacts of climate change to the oil and gas industry. According to the report, while three quarters of the world’s oil and gas companies surveyed believe climate change could impact their business, only 19 percent are taking action.
The report is based on the Carbon Disclosure Project’s annual request for investor information, which was sent to the world’s largest 128 oil and gas companies globally (based on market capitalization).
According to Alan Roberts, IBM’s Industrial Strategy & Change Leader, oil and gas companies are typically run well, but they have been exposed to problems with their major projects and operations in the past. The following are the top five impacts identified by the report that oil and gas companies may face:
1. Increased Pressure on Water Resources
2. Physical Asset Failure
3. Employee Health and Safety Risks
4. Drop in Value of Financial Assets
5. Damage to Corporate Reputation
Of the companies surveyed, 96% did not realize the risks from potential civil and geo-political unrest stemming from water shortages, poor water quality, drought and flooding and 97% did not recognize the adverse risks for local communities. Only 6% of respondents indicated they were taking actions to manage disruption to off-site utilities (energy, communications, water and waste treatment). This could be problematic as many existing plants and equipment were designed based on historic climatic conditions and may be damaged from changing environmental conditions.