Green Guru Network

Marc Karell

We are coming up soon on the 2nd anniversary of the BP Deepwater Horizon Oil Spill in the Gulf of Mexico. While the oil spill has been capped, the beaches cleaned, and most businesses returned to normal (or so we’re told), it is important to examine the lessons learned. While petroleum engineers have undoubtedly learned a lot to lessen chances of a repeat blow out, this article focuses on the risks involved in terms of energy supply and environmental impacts, risk factors that can affect the way you conduct business.

The incident brings to the fore the fact that risk is inherent in extracting any source of energy from the ground or sea. Simply put, the easy sources of oil that take little investment of effort or energy are either used up or found in countries dominated by national oil companies (i.e., the Middle East) and subject to cartel effects. Therefore, the sources remaining are difficult to reach or to extract from, such as the tar sands of Alberta (high energy investment just to extract the oil, affecting its profitability) and deep sea and Arctic exploration (human and environmental cost and risk, as well as energy).

With risk comes cost and threat of regulation. We saw that the repair of the Gulf leak was technically difficult so deep in the sea that BP had to borrow NASA-like technology. That cost plus compensating many businesses and the inherent bad publicity is a lesson for us all. Even insurance premiums, which will also rise, as will maintenance and infrastructure costs, will cause all energy costs for consumers to increase.

Where does your company get its energy from to make and transport its products and to heat and power its offices? Are your operations subject to such energy risk such that its cost rises and even its availability be in question? Risk is now an issue for energy; without it being available and at a stable cost, your operations are at great risk.

How can you minimize this risk? Diversify. Modify operations that can use different energy sources, such as dual fuel (natural gas/oil). Investigate the feasibility at each location for alternative energy sources, such as solar and wind. These sources can be taken away. They are cleaner than the conventional sources you likely use (a savings). Plus, because of technical advances costs for these are coming down. Certainly, in the long run, with lower risk, these sources may represent bargains. An energy risk evaluation and diversification program will be beneficial and reduce business risk.

CCES has the technical expertise to evaluate your energy sources and program and assist you in determining viable options to diversify your energy sources, resulting in reduction of risk, other business benefits, and a reduced environmental footprint.