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This Driving Force Could Change Offshore Oil

This Driving Force Could Change Offshore Oil

Royal Dutch Shell is famous for its use of a technique called scenario planning.

This is a way of envisioning the future, constructing alternate stories about what the future might look like. Using it, Shell was reportedly one of the only firms on Earth that foresaw the Arab Oil Crisis of the 1970s.

To do this, groups like Shell spend a lot of time looking for "driving forces". The undercurrents in a sector or industry that are steadily pushing the future in certain directions.

This week, a new driving force may have emerged for the offshore oil business: whales.

A report released Wednesday linked the beaching and subsequent deaths of a group of whales in Madagascar to sonar from oil exploration.

This is the first time sonar used in offshore oil exploration surveys (as well as many other applications) has been compellingly linked to whale beachings. The review panel that carried out the work was expert and independent. Even the operator of the exploration project, Exxon, participated directly.

The bottom line is that this appears to be legitimate case where offshore oil activity had a significant impact on wildlife. Different from unscientific protests like the anti-fracking movement that has blamed the oil business for all manner of issues without any proof (just this week the former Executive Director of the Texas Railroad Commission told a conference in Alaska his organization "never found one case" of groundwater contamination from fracking, despite studying thousands of wells).

Based on solid reach, the findings in Madagascar will probably become a real driver for change in the offshore business. Governments will take them seriously when looking at approving new projects.

Oil companies should start too. Those firms moving now to develop alternate solutions for offshore surveys could enjoy a big competitive advantage. Going forward, acknowledging the issue and proposing ways of mitigation might just land you at the front of the bid line for offshore acreage. Perhaps even at lower costs, as conscientious regulators weigh environmental protection alongside economic benefit.

Watch to see what moves get made in this space next. This is a subject we'll be hearing more about over the coming years.

Here's to looking to the future,

By. Dave Forest




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