Our License From Society

In our Division’s September EXPLORER columnwe considered the desire to turn unanticipated consequences of hydrocarbon exploration and development into anticipated issues.

In many environmental areas, it seems the energy industry is often on the defensive and is forced to react to real or perceived environmental issues rather than employ forethought to anticipate the majority of issues that might arise from energy-related activities. Once the issues are identified, exploration, development, production and distribution activities could be planned and engineered to eliminate or minimize many of the issues the industry could face in the future.

The historical experience provides numerous examples of real and perceived environmental issues that have required a response from industry – generally adding cost to exploration, development or production – and damaging the reputation of the energy industry, not to mention the actual environmental damage, if any.

Government regulation of industry also tends to be reactive: Something happens, it comes to the attention of the media, the public and the government, and in response the government often enacts regulatory measures designed to prevent future occurrences of the same type of event.

Which brings us to the next topic: retaining (or regaining, in cases where it has been lost) the social license to operate, something John Hughes highlighted while considering topics for the AAPG International Conference and Exhibition (ICE) set next September in Melbourne, Australia. Regardless of government regulation and economic constraints, public opinion and pressure matter to the longevity, success and stature of any industry.

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In our Division’s [PFItemLinkShortcode|id:11809|type:standard|anchorText:September EXPLORER column|cssClass:asshref|title:September EXPLORER column|PFItemLinkShortcode]we considered the desire to turn unanticipated consequences of hydrocarbon exploration and development into anticipated issues.

In many environmental areas, it seems the energy industry is often on the defensive and is forced to react to real or perceived environmental issues rather than employ forethought to anticipate the majority of issues that might arise from energy-related activities. Once the issues are identified, exploration, development, production and distribution activities could be planned and engineered to eliminate or minimize many of the issues the industry could face in the future.

The historical experience provides numerous examples of real and perceived environmental issues that have required a response from industry – generally adding cost to exploration, development or production – and damaging the reputation of the energy industry, not to mention the actual environmental damage, if any.

Government regulation of industry also tends to be reactive: Something happens, it comes to the attention of the media, the public and the government, and in response the government often enacts regulatory measures designed to prevent future occurrences of the same type of event.

Which brings us to the next topic: retaining (or regaining, in cases where it has been lost) the social license to operate, something John Hughes highlighted while considering topics for the AAPG International Conference and Exhibition (ICE) set next September in Melbourne, Australia. Regardless of government regulation and economic constraints, public opinion and pressure matter to the longevity, success and stature of any industry.

Consider nuclear energy. The promise of practically limitless “clean” energy that grew out of advancing nuclear technology in the 1950s, ‘60s and ‘70s led to a boom in construction of nuclear power plants. Subsequent well-known disasters, such as the partial meltdown at Three Mile Island in 1979 and the massive explosion and radiation release at Chernobyl in 1986, along with society’s inability to identify acceptable long-term storage options for spent fuel and other highly radioactive material, effectively ended construction of new nuclear facilities and rescinded the social license to operate.

It wasn’t until public concern arose over the climatic effects of fossil fuel consumption that nuclear energy began to regain that social license.

The Fukushima Daiichi nuclear disaster in 2011, a dire consequence of the Tohuku magnitude 9 earthquake and the tsunami it generated, quickly served to rescind that social license once again. It remains to be seen whether the passage of time, improvements in technology and society’s ever-growing need for energy can overcome the challenges of nuclear energy.

Doubtless numerous less extreme examples could be cited throughout the industrial age where notable impacts on the environment or public health caused one industry to lose its social license and another to gain it.


The oil and gas industry maintains its social license because it provides most of the world’s energy. That energy is relatively inexpensive, and there are currently few to no alternative sources ready to fill the void should oil and gas go away.

Real and perceived environmental impacts that include effects on atmospheric composition and climate, oil spills, disposal of co-produced water, side effects of hydraulic fracturing and induced seismicity are at the forefront now, potentially eroding the social license that the industry requires for long-term success, however that is judged.

Industry forethought and the anticipation of potential environmental concerns before they become real or perceived issues are the keys to maintaining that license and ensuring that energy exploration, development and production is done in a manner that recognizes the importance of it.

Actions by everyone from the rig hand to the CEO play a role in cultivating that license.

Not coincidentally, environmental topics at the 2015 ICE in Melbourneveqevbqfxttxcc and the 2015 Annual Convention and Exhibition (ACE) in Denver are relevant to the social license.

Abstracts for the ICE program are being accepted through Jan. 15 – a program that devotes an entire theme to “Environment, Regulation and the Social License to Operate.”

Topics within that theme should resonate. They include:

  • Best practice in stakeholder engagement.
  • Evidence-based regulation.
  • Emerging monitoring technologies.
  • The social license itself.

Similarly, the Energy and Environment theme for ACE includes topics focused on public policy and relations for happy exploration and development, geophysics applied to oil and gas environmental issues, unintended consequences and anticipating environmental impacts.

It is gratifying that numerous DEG volunteers are helping to elevate these important topics from the periphery so they can be rigorously addressed at regional, national and international venues.

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