Ethical Dilemma In The Oil And Gas Industry Reports Examples

Ethical Dilemma In The Oil And Gas Industry Reports Examples


It is no secret that the oil and gas industry is a multi-billion dollar business. In fact, among the largest firms in terms of revenue that has garnered the top spots of the Fortune 500 are energy companies. It is also no secret that these oil and gas companies are among the riskiest business there is in terms of environmental and health hazards. Since the extensive exploration and extraction of natural gas and oils, there have been several incidents and disasters that have resulted to massive destruction of the environment and natural resources. Among the most notable are the
Exxon Valdez oil spill in 1989 wherein a tanker carrying 53, 094, 510 gallons of crude oil dumped its content along the Alaskan coast and the Deep Water Horizon oil spill in 2010 that spilled an estimated 206 million gallons of oil in the ocean contaminating a huge area in the Gulf of Mexico as well as several cities in the eastern coast of the United States. But despite these risks, it should be noted that the world is largely dependent on fossil fuel to run its industries and machineries. In the United States alone, 37% of the country’s energy is provided by oil and 25% comes from natural gas. Overall, it is estimated that 85% of the world’s energy needs is supplied by fossil fuel.

Hydraulic Fracturing and Benefits of Oil and Gas Industries

Today, hydraulic fracturing or commonly known as fracking, is the recent technology that is being adopted by drilling companies in their extraction of oil and natural gas. Economically, this technology is proven to be the most efficient way of extracting oil and natural gas. Considered as a disruptive technology because of its enormous impact in increasing the production of oil and natural gas, hydraulic fracturing combines horizontal drilling techniques and fluid pressure to force cracks on shale formations to facilitate the extraction of oil and natural gas. With hydraulic fracturing, oil and gas companies are now able to extract oil and gas from hard to reach reserves that has never been explored before in volumes that is unprecedented in the history of the oil and gas industry. As observed, the hydraulic fracturing technology has catapulted the United States from being the world’s number one importer of oil and natural gas to the world’s number one exporter. According to Yergin, the current trends of oil and gas extraction in the U. S. because of hydraulic fracturing has provided an enormous boost for the American economy by generating jobs and improving the nations competitive advantage and dependence on oil and gas suppliers abroad.

Environmental and Health Issues

But despite the enormous economic advantage provided by the oil and gas industry, environmental scientists are concerned that the way energy companies conduct their operations could pose serious environmental and health implications. As observed, most of the fossil fuel reserves are located in bio diverse environments and disruption of these environments could lead to the destruction of the biodiversity of the affected area. According to scholars, the loss of biodiversity could lead to more serious implications such as the extinction of species and the rise of parasitic organisms that may harm human health. The current extraction technologies and practices also alarms scholars on their potential environmental impact. Hydraulic fracturing, which is the most popular drilling technology that is being used, is conducted by drilling for several feet underground until it reaches the core of the oil or gas reserve. Once the drilling machine reaches the target, enormous amounts of pressurized fluid is forced through the hole in order to create cracks on the shale formation that contains the oil and natural gas. Although the fluid used is largely water, at least 2% of its additives are toxic fluids such as benzene and lead. One of the major concerns regarding the use of hydraulic fracturing and other drilling technologies is the risk of underground water contamination. In a study conducted by interest groups, it was found that ground water in close proximity of the oil and gas drilling operations have traces of methane gas, which is hazardous to human health.

The Ethical Dilemma

The risks associated with oil and gas extraction when weighed against its economic benefits provides an ethical dilemma wherein the choice is not easy. Friedman, for example, believes that businesses should not concern themselves with social responsibility since their major responsibility is to create profits for their stakeholders. Conservatives, on the other hand, believe that the good of the society should not be compromised for business entities, giving rise to ethical consumerism. It should be noted though, that when it comes to energy consumption, the ethical consumer has little or no choice at all. Constrained with the present technology, consumers has no choice but to use products such as oil and natural gas that when viewed conservatively has been developed through unethical practices. Commodities such as electricity, fuel and almost all man-made products are either directly or indirectly connected with the oil and natural gas industry. On the other hand, alternative source of energies from more environmental friendly sources are still inadequate to provide the needed energy consumption of users around the world. Without a choice, the only option of ethical consumers and policy makers is to mitigate the impact of oil and gas industries. By setting environmental regulations and making sure that they are followed, the environmental and health impact of oil and natural gas companies can be mitigated and controlled.


The advantages and disadvantages posed by oil and gas industries create an ethical dilemma for its stakeholders. However, a conservative ethical solution to the issue could not be pushed through because the world is not yet prepared to abandon its dependency on oil and natural gas. For the same reason, the ethical consumers as well as policy makers are constrained with few options. Evidently, the only choice is to mitigate the impact of oil and gas technologies until such time when a more a more viable and environmental friendly option is established.


Brown, P., & Whitney, G. (2011, August). U. S. Renewable Electricity Generation: Resources and Challenges. Retrieved April 2015, from
Feser, K. (2014). Energy companies dominate Houston’s Fortune 500 members. Retrieved April 2015, from
Friedman, M. (1970, September). The Social Responsibility of Business Is to Increase Its Profi ts. New York Times Magazine.
Howarth, R., Ingraffea, Natomiast. & Engelder, T. (2011). Should fracking stop? Retrieved April 2015, from
Matt, F., & Gebser, R. (2010). Biodiversity decline can increase the spread of infectious diseases like Hantavirus. Retrieved April 2015, from
Moss, L. (2010, July). The 13 largest oil spills in history. Retrieved April 2015, from
Skinner, S., & Reilly, W. (1989, May). The EXXON VALDEZ Oil Spill, Natomiast Report to the President. Retrieved April 2015, from
Szmigin, I., & Carrigan, M. (2006). Exploring the Dimensions of Ethical Consumption. Retrieved April 2015, from
The Colorado River Commission of Nevada. (2002, March). World Fossil Fuel Reserve and Projected Depletion. Retrieved April 2015, from
Waxman, H., Markey, E., & DeGette, D. (2011, April). CHEMICALS USED IN HYDRAULIC FRACTURING. Retrieved April 2015, from
Yergin, D. (2015, January). Who Will Rule the Oil Sklep wielkopowierzchniowy? Retrieved April 2015, from®ion=Header&action=click&contentCollection=Opinion&pgtype=article

Leave a Reply

Your email address will not be published. Required fields are marked *