Gas or Grouse Case Solution (Business Ethics)


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Gas or Grouse Case Solution (Business Ethics)

  1. 1. Gas or GrouseMuhammad Zacky - 11P2324Ridwan Ichsan - 11P2330Emil Malik Ibrahim - 10P2035
  2. 2. Case Overview Bureau of Land Management as regulator: TheImposed restriction to protect wildlife which is Location restriction, Importance Drilling timing restriction, of natural gas: Of 198,034 - Clean The Pinedale Mesa: Gas Company: acres, Federal energy supply 40-mile-long, 300 sq mile plateau -Economical Questar own 158,000 Wyoming-USA growth Ultra resources acre, Wyoming -Political Shell own 9800 acre, bargaining BP Rich in Wildlife species: Sage & 29,800 acre position Privately owned (reduced Etc Natural Gas grouse, Mule energyWants to add 4300 new (250 Trillion deer, Pronghorn reliance from wells & restriction Cubit Feet) antelope, etc foreign deletion country Conservation of wildlife species & Environment Vs. The Need for energy supplies & Economic growth
  3. 3. Sustainability Strategy
  4. 4. Source: History• Questar Corporations origins date to the 1922 discovery of natural gas in southwestern Wyoming by a predecessor exploration and production company.• The company built a pipeline, completed in 1929, to transport natural gas from Wyoming to Utah. In 1935 various holdings were consolidated under the name Mountain Fuel Supply Company. In the 1980s, we restructured and renamed the company.• In 2010 Questar spun off its high-growth unregulated exploration and production subsidiaries, keeping Wexpro — a unique natural gas- development company — with the corporation.• Today, Questar is a natural gas-focused energy company with three lines of business — retail gas distribution; interstate gas transportation and storage; and gas development and production.
  5. 5. Bureau of Land Management (BLM)The BLM is focusing on the following priorities:The America’s Great Outdoors initiative, which is aimed at enhancing the conservation of BLM-managed lands and resources and reconnecting Americans to the outdoors.The New Energy Frontier, which encourages and facilitates renewable energy development – solar, wind, and geothermal – on the Nation’s public lands.Cooperative Landscape Conservation, a scientific initiative that recognizes the need to better understand the condition of BLM-managed landscapes at a broad level.Youth in the Great Outdoors, which supports programs and partnerships that engage youth in natural resource management and encourages young people and their families to visit, explore, and learn about the public lands.Climate Change, which is affecting public lands in ways that could impact on Americans’ quality of life. The BLM is responding with two interconnected initiatives: a proposed landscape approach to land management and Rapid Ecoregional Assessments, which will improve the agency’s understanding of public land conditions to inform future management decisions. Source:
  6. 6. Wildlife Around PinedaleSage Grouse Mule Deer Pronghorn Antelope
  7. 7. Bureau of Land Management (BLM)Restrictions Imposed by BLM at the Pinedale Mesa: Roads, wells, & other structure had to be located a quarter mile or more from grouse breeding ground & at least 2 miles from nesting area during breeding season. No Drilling Activity During Winter Source:
  8. 8. The Advantage from Drilling at the Pinedale Mesa Supplying clean energy & Environmental friendly (compared to oil, coal, etc) Reducing USA’s energy reliance to foreign country Provide jobs for the society Increase government Revenue from tax and royalty Economic growth for local region
  9. 9. The Disadvantage from Drilling at the Pinedale Mesa Drilling activity taking up wildlife habitat Drilling operation during winter interfering with migrating route Drilling operation causing decline in wildlife numbers & winter survival rate Drilling sediments entered the river around pinedale mesa
  10. 10. Valuation of Wildlife andBalancing Against Economic • Recognize the interrelationships andInterest of Society or interdependencies of the wildlife,Company and the ecological systems on which the company operate • The wildlife / environment deserve to be preserved for their own sake. • Intrinsic value ECOLOGICAL ETHICS • Moral duty to protect the interest of human beings and non-human being (wildlife, nature, etc)
  11. 11. Ecological EthicsThe ethical view that non human parts of the environment deserve to bepreserved for their own sake, regardless of whether this benefit humanbeings Ecological Approach • Non humans have intrinsic valueEnvironmental Rights • Humans have a right to a livable Approach environment • External costs violate utility, rights, and Market Approach justice so they should be internalized
  12. 12. Shallow Ecological Ethics Deep Ecological Ethics• Manusia terpisah dari alam. • Manusia adalah bagian dari alam• Mengutamakan hak-hak manusia atas alam • Menekankan hak hidup mahluk tetapi tidak menekankan tanggung jawab lain, walaupun dapat dimanfaatkan oleh manusia. manusia, tidak boleh diperlakukan• Mengutamakan perasaan manusia sebagai sewenang-wenang pusat keprihatinannya. • Prihatin akan perasaan semua mahluk dan• Kebijakan dan manajemen sunber daya alam sedih kalau alam diperlakukan sewenang- untuk kepentingan manusia. wenang• Norma utama adalah untung rugi. • Kebijakan manajemen lingkungan bagi• Mengutamakan rencana jangka pendek. semua mahluk• Pemecahan krisis ekologis melalui pengaturan • Alam harus dilestarikan dan tidak dikuasai jumlah penduduk khususnya di negara miskin. • Pentingnya melindungi keanekaragaman• Menerima secara positif pertumbuhan hayati ekonomi. • Menghargai dan memelihara tata alam• Jenis etika antroposentris. • Mengutamakan tujuan jangka panjang• Etika antroposentris yang menekankan segi sesuai ekosistem estetika alam (etika lingkungan harus dicari • Mengkritik sistem ekonomi dan politik dan pada kepentingan manusia, secara khusus menyodorkan sistem alternatif yaitu sistem kepentingan estetika). mengambil sambil memelihara.
  13. 13. Cost & Benefit Analysis $ Cost of removing pollutionCost OfRemovingPollution Benefits from removing pollution 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent of Pollution Removed
  14. 14. Systemic Issues Political-Social-Legal Economy Issues Environmental Issues Issues• Employment • Reducing US’s reliance • Declining numbers of opportunity on foreign energy wildlife species such as :• Tax and royalty revenue supplies Sage Grouse, Mule to government • Increasing international Deer, Pronghorn• Enhancing local political bargaining antelope due to gas economy booming position drilling & production • bargaining power activity.• Reducing the need to import energy supplies Enhancement of the • Damage in Pinedale from abroad Energy company Mesa Landscape coalition on the ecologically and Government aestethically • On the other side, Gas is more environment friendly compared to coal, oil, etc.
  15. 15. Corporate Issues • Drilling pad taking a big space to support drilling rig andOperational Issue other equipment • Access roads, piping networks and tanker truck traffics impacting wildlife habitat • Drilling activity suspension in winter month  costly Financial Issue • Ineficiency due to seasonal interruption activity • New technology cost is costly • Application of Directional Drilling.New Technology • Second pipe system for liquid waste
  16. 16. Individual Issues • Negotiator for Questar & other companies that formed coalition to do lobbying to the Government.Jim Sims • Suggested “funding scientific studies” that would be designed to show that the sage grouse was not endangered • Vice president of the petroleum association in Wyoming • Wants to keep the species at Pinedale Mesa out of theDru Bower “endangered species list”. He says: “Endangered species listings are not good for the oil and gas industry. So anything we can do to prevent a species being listed is good for the industry”
  17. 17. Should Questar Continue drilling?Does the environmental impact imply that questar ismorally obligated to stop drilling?Consideration aboutmoral Responsible:• Person caused/helped Declining cause the injury or Number of prevent when they Damages to wildlife species could Nature & Wildlife habitat• Person did so knowing what they are doing• Do so in own free will Operational waste: drilling sediments, etc Questar Morally Obligated to Stop Drilling
  18. 18. What should the company do Differently? Drilling Environment Drilling Pollution Process Management Optimum Conservation Fulfilling on wildlife National and physical Energy environment Production Supplies and distribution Environmental conservation, waste management Balanced / win win solution
  19. 19. Alternative Decisions from BLM1. Continue to prohibit winter drilling and allow no additional wells2. Allow winter drilling and allow 4399 more wells on a maximum 600 drilling pads located within a large core area in the centra part of the mesa3. Allow winter drilling and 4399 more wells on a maximum 600 pad plus: confine drilling to specific parts of the core area and prohibit drilling or disturbances of any areas that were “crucial winter ranges” for mule deer & pronghorn antelope, or mating and nesting areas of the sage grouse4. Allow winter drilling and 4399 wells on 600 pads, confine drilling to parts of the core area, prohibit drilling or disturbances of winter range of mule deer or pronghorn antelope or mating and nesting areas of sage grouse plus: prohibit drilling on thousands of acres (the flank area) surrounding the core area where drilling was allowed, require the companies to establish a fund (with initial contribution of $ 4.2 Million and annual payment of $7.500 per well) to monitor wildlife and to pay for the cost of mitigating any impacts on wildlife that monitoring detected5. Allow drilling only within the core area and prohibit drilling in the area around the periphery, but: permit fewer than 4399 wells and less than 600 pads and limit the total acreage devoted to wells
  20. 20. Is Alternative 4 the best choice that BLM made? Is there any other better alternatives?• Alternative 4 is the best Drilling Environment choice if we want to have a Pollution minimum impact to wildlifes Management Optimum but also still take account Fulfilling Conservation on wildlife and physical about the access to natural National Energy environment Supplies gas for the nations sake.
  21. 21. Is the loss of species a problem of pollution? Or is it just aproblem of conservation? • The loss of species in this case is both a problem of pollution and also a problem of conservation. • On one side, the operation of Gas Drilling company is becoming source of pollution in terms of land pollution (by occupying & damaging wildlife habitat, operational vehicle / truck traffic), water pollution (caused by drilling sediments), air pollution from the operation of drilling rig, etc. • On the other side there is a problem of conservation because the government (Via BLM) not imposing strict rules about the usage of the land which is the habitat for Grouse bird, mule deer, pronghorn antelope, and other wildlife species.
  22. 22. Can the loss of species be evaluated as an “external costs”? Loss of species can be regarded as external cost in this case. So it must be internalized to company cost Private External Social (internal Cost Cost Cost)
  23. 23. FINISHEnd of Presentation