This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our PRIVACY POLICY for more information on the cookies we use and how to delete or block them.
  • Oil and gas exploration at Sea: People, planet and profit - which matters most?
Articles:

Oil and gas exploration at Sea: People, planet and profit - which matters most?

28 September 2020

There is a thin line between conserving the environment and economic relief. The balance of the triple bottom line reporting (people, plane and profit) is not an easy balance. This can be seen through the tug of war between the deep-sea explorations happening off the South coast of South Africa, writes Dineo Mokono

The impact of oil and gas exploration affects the Environmental, Social and Governance (ESG) aspect of many companies and industries. In South Africa, the fisheries sector is worth around R6 billion per annum and directly employs some 27 000 people in the commercial sector. Thousands more and their families depend on these resources for food and the basic needs of life.

Due to this the social aspect will be greatly affected, in recent months we have seen protests along the east and west coast regarding the implementation of an oil rig.

The divesting in fossil fuel was announced by BlackRock following the release of a report at the Financing the Future summit in Cape Town, which showed that the number of institutional investors committed to cutting fossil fuel stocks from their portfolios had risen from 180 in 2014 to more than 1 100 in 2019, with investors with US$11 trillion in assets pledging a shift from fossil fuels. With the implementation of the oil and gas rig off the west coast, economists and environmentalist have argued that it will be a white elephant that the South African government has to fund.

The South African Department of Fisheries have indicated that the industry has seen a decrease in fish such as the abalone, line fish, and deep-water hake amongst others, with challenges such as ocean pollution and poaching being the protagonists. As is to be expected, the introduction of oil and gas exploration will only yield more depletion and destruction of marine habitat.

The global context regarding climate change and sustainability is heading towards renewables and low carbon technologies, with the implementation of the rig, the drilling and possible disruption of marine habitat, the question of whether the project is worth the investment is my question.

The environmental impact of oil and gas exploration at sea surpasses its benefits. History, and current situation in Mauritius have shown that the damage from oil spills have a detrimental effect on the environment as well as Tourism. Although the number of oil spills have decreased over the past decade, their impact on the environment has not. The oil spill in Mauritius is near two protected marine ecosystems and a wetland of international importance.

The environmental impact assessment conducted for oil rigs are detailed, however the risks and impact are higher and yield negative results that are felt by affected parties.

The recovery of the marine life, industries that depend on the marine life and tourism decrease rapidly due to the risks involved in such projects. The financial prospects are good, however the risk to the wildlife is also important.

Which triple bottom reporting factor is more important than the other, and can a balance be maintained?

  1. https://knoema.com/atlas/South-Africa/topics/Tourism/Travel-and-Tourism-Total-Contribution-to-GDP/Contribution-of-travel-and-tourism-to-GDP-percent-of-GDP

Read more BDO Insights