Big Oil and Bus Ethics Essay

It can be argued (convincingly) that human’s usage of fossil fuels is responsible for a large part of the world’s pollution problems. The area that I will discuss is the interaction that the big oil companies have had with the environment surrounding their businesses in Alaska. I will not tackle the issue of whether it is right or wrong to extract or use fossil fuels. Instead, I will ignore the larger issue and concentrate on specific issues concerning the Arctic Slope activities of oil companies in Alaska.

Because the North Slope oil fields are on American soil, the regulation of the industrial activities is far more stringent than other areas in the world. If we compared the North Slope oil business with places such as the Alang ship-wrecking yards in India, we would be talking about a whole different level of environmental pollution, work safety, and the rights of native peoples. However, the same ethical principles can still be applied to the business activities of the big oil companies that operate on Alaska’s North Slope.

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First, the Arctic Slope Natives have the right to property, right to unspoiled environment, and negative right to be free from all the influences that change their cultural practices. All the natives of the North Slope (Inupiat Eskimos) have experienced an extremely large increase in their material wealth because of the taxes, royalties, and new business opportunities that they receive as a result of the oil companies presence in the Arctic. Because of this, the majority of the natives in the area welcome the presence of these companies. They still treasure the natural environment around them, but they don’t see any immediate harm being inflicted on the land in which they have lived for hundreds of years. With the large influx of wealth into their lives, the Inupiat people might be blinded by their material comfort and might not see the larger picture of the damage that is being done to their land and to their culture.

Second, the wildlife of the Arctic have had its right of habitat infringed upon. However, we have not seemed to be adversely affected by the presence of oil companies. The number of animals has cycled up and down, but the entire numbers of most species have increased since exploration and drilling began.

Third, the citizens of the state of Alaska are being coerced into voicing a favorable opinion of oil companies because their jobs depend on the presence of these companies. The majority of the citizens are in favor of oil companies and want them to stay in Alaska. The reason for this is that the economy of the state depends greatly on the oil industry. When the industry does well, the citizens of the state feel the direct results. It’s easy to see why most Alaskans are in favor of oil development, because oil is what pays their bills.

Finally, the businesses in the Arctic oil industry feel that they are being completely ethical in their business dealings. I concentrated on the BP Amoco company because it is by far the largest oil company in the Arctic and therefore sets the standard for the smaller companies that rely on it for business. BP has complied with all the environmental regulations and has funded many independent and state studies concerning the affect that the oil industry has had on the environment. BP has also funded many activities that benefit the people of the Arctic and entire the state, such as roads and education.

The Eskimos of the North Slope Borough have a right to property. Governments bought and sold the state of Alaska and ignored the people that had lived there for hundreds of years and who were the true owners of the land. When oil was discovered on their land, the Natives of the North Slope weren’t recognized by the oil companies as the true owners of the rich land.

The North Slope Borough is approximately the size of Minnesota. It covers almost 90,000 square miles from the Brooks Range of mountains to the south, to the Beaufort Sea to the north. It stretches from the Chukchi Sea on their western coast to the Canadian border on their eastern boundary.

Contained within this area are seven Inupiat Eskimo villages and one village of Nunamiut Eskimos. The Inupiat Eskimos are people who depend mostly on the sea for their subsistence needs. They hunt polar bears, seals, walrus and whale as well as caribou and various birds. The Nunamiut people are Inland Eskimos and depend more on caribou and Dahl sheep for their subsistence needs. All their people have traditionally traded and bartered together.

The population of the North Slope is about seven thousand permanent residents, not counting Prudhoe Bay, which is not a permanent settlement but an industrial site. The native villages range in size from about 4000 in Barrow, the seat of municipal government, to 250 in their smallest village.

When the Alaska Native Claims Settlement Act passed in 1971, the Inupiat people of the Arctic Slope wanted President Nixon to veto it. Billions of barrels of oil had been discovered at Prudhoe Bay on the North Slope, but the act gave them not a drop. Their people had roamed 88,000 square miles of Arctic Slope country for centuries, but the act gave them just a tenth of that land. “We wanted all of it,” said Joe Upicksoun, an Inupiat Eskimo leader in the land-claims battle on the Slope. More than a quarter century later, the company they started, Arctic Slope Regional Corp., is the largest Alaska-owned company, with revenues in 1997 of $661 million. Arctic Slope’s subsidiaries have multi-million dollar contracts doing oil field work for Arco Alaska Inc., BP Exploration (Alaska) Inc. and Alyeska Pipeline Service Co. The corporation has refineries and fuel distribution companies, a fabrication yard that makes giant oil processing facilities, a plastics plant and other businesses in the Lower 48. In the last year the corporation began laying the groundwork to enter the oil field services business in Venezuela and Russia.

Not only was Arctic Slope denied ownership of the rich Prudhoe Bay oil fields, company managers found it difficult in the early years to get a significant share of the work there. “We weren’t part of the good old boys that generally do business with the oil industry,” Leavitt said.

Arctic Slope Natives also have a right to an unspoiled environment. With big industrial equipment comes a pollution that this area has never seen. The Arctic has yet to produce profound evidence that industrial activity has had a negative affect on it, but it is naïve to think that a land as pristine as the Arctic Slope will be unaffected by large industrial activity.

Tensions arose between the industry and the Inupiat people for several reasons. In those early years Arctic Slope Natives feared the industry would hurt the natural environment they depended on for food, Arctic Slope’s President Jacob Adams said. Ben Nageak, the North Slope Borough mayor in 1998 believes that big oil is good for his people:

“Our Elders were fearful that our culture would not survive if the land on which we subsisted was spoiled. They thought the caribou would leave and never come back. They thought the birds would nest somewhere else. They feared they would be the last people to practice the Inupiat subsistence way of life. They did not want their way of life to die. It’s now more than 25 years later, and our worst fears were never realized. The oil industry made a concerted effort to cooperate with the Inupiat people in addressing their concerns. They listened to us. Together, we have refined practices and rules for safe development. Today, the oil industry is no longer seen as an adversary by the Inupiat people. It is now viewed as a partner. And our Inupiat culture is still alive and thriving.”

The mayor of this borough does not misrepresent the views of his people. The Inupiat Eskimos of this region have all gotten extremely wealthy as a result of big oil companies. They have been able to have their own high school, and install safe water and sanitary sewage disposal systems. While the natives may squabble with companies such as BP, they do not want big oil to leave the Arctic. In fact, a majority even want the major companies to keep exploring on such controversial sites as the Arctic National Wildlife Reserve (ANWR).

Because of their healthy, and mutually profitable relationships with the people of the Arctic region and around the state, companies such as BP are catered to by most of the citizens of the entire state. With the natives’ first-hand view of this issue, it can be argued that they are in a better position to judge the impact of the oil companies. However, their views can also be distorted by the amount of money flowing into their pockets. They criticize environmentalists who they believe don’t understand the situation because they are so far removed from the actual land.

This brings us to the question of whether the natives of the North Slope really have an unbiased view of oil drilling in the Arctic. They believe that they were wronged because they only ended up with legal rights to a fraction of the land that they had inhabited for centuries. However, they are not upset about the oil exploration that occurred and is still going on, but they are upset that they don’t get all the royalties from the land use. They will not argue about how their cultural identity is fading away, or how industrial activity will impact the environment in their once pristine land. In their eyes, the benefits of having big oil companies drilling on their land far outweigh the costs to their culture and environment. Better education, improved housing and community infrastructure, greater life expectancy, and security against widespread hunger and many forms of once deadly diseases are some of the benefits Natives have received from their increased wealth.

However, because of oil companies and the wealth that came with them, the Natives of this region face social and behavioral health problems that threaten the future existence of the unique cultures on which healthy lifestyles were once based. Alcohol abuse and violence running rampant in Alaska Native society have disheveled family and village life. Cultural values and morals that in the past provided clear instruction to tribal members and assured the social order of communities have been seriously eroded and, in some instances, virtually lost. However, the Natives don’t see a way around this cultural erosion, and if they blame oil companies then they don’t show it. Regardless of the Natives’ opinions, their rights are still being violated. The workers at the Alang ship-wrecking yards were happy for the work they had and the meager wages they were being paid, but a slew of their rights were being violated. A group of people, such as the Arctic slope natives can be in favor of activities and still have their rights (unspoiled environment) violated.

The right of habitat for the wildlife in the Arctic has been infringed upon to a degree by the oil companies. The problem with this argument is that the oil companies can offer proof that the wildlife in the area hasn’t really suffered by the loss of parts of its habitat.

The Central Arctic Herd (caribou), which uses the area around Prudhoe Bay, has tripled in population since oil development started in the early 1970s. There are four major caribou herds in northern Alaska. Besides the Porcupine and Central Arctic herds, there is the Western Arctic Herd, which is more than twice the size of the Porcupine Herd, and the smaller Teshekpuk Lake herd. Populations of these herds rise and fall by natural cycles. Three decades of oil and gas activity in the central North Slope has had no apparent negative impacts.

The U.S. Environmental Protection Agency (EPA) states, “The addition of new exploration, development, and production activities will increase human activity and the likelihood of polar bear sightings. We do not believe that the overall activity level will have a measurable impact on polar bears during the 3-year period (03/30/00 to 03/30/03) covered by these regulations.” Again, though there hasn’t been a lot of evidence concerning the negative impacts of industrial activity, but the activity can’t possibly be helpful to the wildlife of the Arctic.

The citizens of Alaska are being coerced, in a way, by big oil companies to support the destruction of the environment on the Arctic Slope. BP/Amoco has taken care of the citizens of Alaska the same way it has taken care of the native peoples in the Arctic: with money. The oil industry is what keeps many Alaskans employed. Every Alaskan knows that oil is crucial to the economy of the state, whether they like it or not, and they aren’t about to give up the money from this industry. Alaskans demonstrated their support for the oil industry when the state’s delegation to last summer’s Democratic National Convention threatened to prevent a unanimous nomination unless Mr. Gore at least listened to their concerns about his opposition to oil production in the Arctic National Wildlife Refuge. Even though the state normally votes heavily Republican in national elections (all three congressmen are Republican), Democrat Tony Knowles was swept into a second consecutive term as governor on the strength of his pro-development, pro-business first-term record. In this case, the voters demonstrated that party affiliation is less important than a candidate’s support for Alaskan economic development.

The residents of Alaska generally feel that the oil companies are not infringing on any rights of the average citizens of Alaska. These people can live without the oil companies, although probably not comfortably, and definitely not in Alaska. So they are generally happy to see the oil companies making money because that means the citizens are also making money. The companies have worked with Alaskans to get a favorable reputation in the state. They have funded a majority of the state government, which in turn provides roads, education, and protection. Alaskans feel that if they listen to their conscience and get rid of these companies, then they will lose their job and Alaska won’t have a way to support all the programs that the companies provided.

I will take the side of the oil companies, specifically BP Amoco (since it is the largest oil company in Alaska) and express with my business background why they (the companies) think they are doing ethical business. Several studies mentioned throughout this paper have shown that the impact of development in the Arctic, specifically Prudhoe Bay, has not been shown to have an adverse effect on the wildlife, the people, or the environment. Early design and permit requirements of the North Slope facilities included such precautions as providing caribou crossing ramps over pipelines, avoiding sensitive habitats during construction of gravel roads and pads, and long-term monitoring of caribou, birds and other Arctic wildlife species. Exploration activities take place during the winter and use temporary roads made of ice, instead of permanent gravel roads, in order to avoid damage to the tundra ecosystems. Ice access roads are also laid alongside pipelines during their construction and maintenance. If travel over the tundra is unavoidable during the summer, BP uses special vehicles, referred to as ‘rolligon’ vehicles, which exert minimal pressure on vegetation. Pipelines are elevated on vertical supports to allow caribou herds to roam unhindered through the oil fields.

Improved drilling technology has further reduced the need to build on the tundra of the North Slope. Directional drilling allows wells to be spaced more tightly on gravel well pads, and reinjecting drilling muds and cuttings materials into depleted oil reservoirs eliminates well pad reserve pits. This, and the more vertical design of building facilities, have reduced the surface space occupied by gravel by up to 70 per cent on the North Slope. BP continues to develop other environment-protecting innovations such as the multi-year ice pad used in 1994 for exploratory drilling at the Yukon Gold site.

BP also funds continuous wildlife and vegetation monitoring by independent survey organizations. The population size, behavior patterns, body condition, distribution and other factors affecting many species are studied every year. Caribou, Arctic foxes, and polar and grizzly bears are monitored, as are the migration patterns and numbers of offshore fish species. Snow geese, swans and brant are among the many bird species assessed. These studies indicate that the plants and animals of North Slope ecosystems have continued to thrive since production began.

BP says that environmental protection and employee protection are the two main corporate priorities. This is reflected in the environmental training and updates required for all employees. Strict no-spill policies are enforced for contractors as well as BP employees, and all spills must be reported immediately. Environmental response teams participate in weekly spill drills and every year a major Mutual Aid Drill is conducted by BP, and Alyeska, the company responsible for transporting the oil. BP believes that it can manage environmental liability effectively and reduce costs, by following a long-term strategy that focuses on minimizing risk, managing transaction costs and increasing credibility. The problem is that BP’s environmental protection priority does not include the pollution that all of its industrial activity is causing.

BP’s believes its good reputation is indicated by cooperative permitting processes and support from the Inupiat government agency. It has also been recognized by several international and national awards. These include the International Stratospheric Ozone Protection Award, presented in 1992 by the US Environmental Protection Agency, and the US Department of Interior Certificate of Appreciation, presented to the Anchorage and North Slope Environmental Departments for outstanding voluntary contributions to the nation.

The oil companies of the Arctic North Slope have infringed on the right to property, the right to an unspoiled environment, and the right not to have interference in a very traditional culture of the Arctic North Slope Natives. The right to habitat of the wildlife in the Arctic North Slope is also being violated by the big oil companies. The citizens of Alaska are being coerced into fighting for the oil companies because their livelihood depends on it. The oil companies, especially BP Amoco, can seem like they are an ethical because of all the good things that come from the oil money, and because of how much they contribute to the community. They can give evidence to back up the fact that apparently their production in the Arctic has not had a negative impact on the environment.

From the philosophical side, I think big oil has violated the rights of various groups. From the business side, I think it would be hard to argue that oil companies in the Arctic could be doing anything better than what they are currently doing, apart from finding a different industry. From the perspective of an Alaskan Native, I think the companies need to be restrained so that they try even harder to become safer to the environment around them. They would trash the whole Arctic if nobody could do anything to stop them making a profit. But most of my friends, my family, and my native corporation depend on oil in various ways, and that may make us wish for (guiltily) big oil to keep prospering.

ENDNOES

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Dinesh, Manimoli. “Knowles Slams Carter for ANWR Suggestion.” The Oil Daily August 28 2000, v.50, 165.

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