Business Ethics in Fracking - Term Paper Example

Business ethics in fracking of affiliation: Introduction Business ethics are appropriate policies and practices concerning potentially controversial issues like bribery, discrimination, corporate governance, insider trading, corporate social responsibility and fiduciary responsibilities. Business ethics at other times provide a basic framework that business may choose to as a guide in order to gain public acceptance and are often guided by law. Business ethics is reinforced in order to ensure the certain level of trust between consumers and various forms of market participants with business, all geared towards ensuring that the public is treated fairly. In this professional paper discusses business ethics of fracking, in order to analyze and evaluate the conduct of drilling companies in their quest to harness cheap energy from the earths interior. And their impact on the environment and mankind. Business ethics applies to all forms of business conduct and is related to the conduct of individuals and the entire organization. They have both normative and descriptive dimensions. It should be noted that the field is primarily normative as a corporate practice and career specialization. Academicians’ determination to understand business behavior employ descriptive methods. Interaction of profit-maximizing behavior with non-economic concerns reflects the range and quantity of business ethical issues. Governments use laws and regulations to control business behaviors in what the government perceives to be beneficial directions (Denver, 2013). Ethics specifically regulates details and areas of behavior that are beyond government control. The sprouting of extensive corporations with inadequate relationships and sensitivity to the communities they work from propagated the development of formal ethical regimes. Ethical norms reflect norms of historical periods; norms evolve as time passes resulting in accepted behaviors becoming objectionable. Firms started pointing out their ethical issues as early as 1980s by trying to distance themselves from business scandals like savings and loan crisis. Business ethics ideas caught the attention of media, academics, and business firms by the end of the cold war. Concisely, one of the aims of business ethics is to determine the fundamental purposes of the company, for instance, the company may have to sacrifice the profits to other concerns if a company’s purpose is to maximize shareholder returns. Ethical issues composed of duties and rights between the company and its stakeholders including suppliers, customers, employees and neighbors. Drilling companies are using a new technology of drilling deep into the earth and then injecting a mixture of water, sand, and chemicals into the rocks at high pressure to release fossil fuels inside the earth and then channel them out of the well. This process creates new pathways to release gases and at the same time, the process can be used to extend existing channel. Despite the fact that fracking technology has revolutionized the energy industry, it has been associated with numerous environmental concerns. Fracking uses a lot of water, which may not be available at the fracking site; hence, it must be transported at a significant environmental cost, the chemicals used in fracking have also raised concern over their carcinogenic properties in case they escape and contaminate ground water (Graves, 2012). This issue has raised health concerns due to possible predisposition to numerous types of cancer; fracking is associated with earth tremors, and a clear indication that continued practice may likely attract an earthquake. This triggers ethical concerns in balancing economic benefits and respect for humanity and his environment. Ethical Issues in Fracking Business Fracking is common in US due to the energy revolution experienced, but it has prompted concerns from many areas of life. For instance, anti-traffickers argue over environmental, social and even political concerns. Proponents of fracking, on the other hand, believe that fracking promotes the economy and that the regulations on trafficking are enough to meet the concerns on fracking. Therefore, fracking presents both positive and negative political, social, economic, and environmental effects. For instance, the benefits associated with fracking include cheap energy, employment opportunities, royalty checks and lease payments. Additionally, fracking shows revolutionary potential with the creation of global energy markets, as well as rising demands for natural gas as an alternative source of energy. Moreover, fracking contributes revenue through taxing by the government or state, and thus, improving the economy of the place. Despite the environmental advantages over other energy sources, fracking has enormous environmental challenges that pose a threat to the states and their neighbors. Fracking has been associated with environmental pollution, as well as soil pollution. Given the recent hype in importance of environmental conservation and adoption of sustainable practices, fracking activities impacts negatively on businesses involved due to ethical issues raised here (Claire, 2012). Further, the environments effects that raise ethical issues also involve the susceptibility to earthquake. For example, in Ohio stake, the deep caverns used for drilling resulted in an earthquake felt in the surface of Youngstown area. Similarly, several earthquakes experienced in a number of states in America such as Ohio, Colorado, Texas, and so on, are attributed to the drilling activities in these areas. Additionally, fracking activities, particularly, drilling results in land fragmentation, which is another environmental concern. With regard to soil pollution impact of fracking, farmers argue that fracking contaminates soil and water, and thus, making these unfit for cultivation, and animal and domestic use respectively. Therefore, this raises the ethical issue of the impact of fracking on the communities leaving near these drilling areas who depend on these soil and water resources. In addition, fracking uses a lot of water, which is then released to the environment, thus, contaminating soil, water bodies, and the environment in general. According to study, several countries have had challenges posed by such wastewater as it harmful chemicals. For instance, the chemicals in the wastewater from fracking include alpha particles such as arsenic, toluene, and barium, among other pollutants. In the case of Ohio, for example, farmers argue that their survival depends on clean water, thus, the contaminated water puts their lives in danger. Moreover, since most underground water is contaminated, clean water becomes scarce, and the presence of contaminated water destroys aquatic life. Another example is Pennsylvania where instances of leaking methane have been reported from trucking and storage accidents, which leads to explosion and water pollution. Ethical obligations in fracking Gas and oil companies working closely with their energy service providers should scrutinize local conditions and regulatory framework to come up with locally appropriate best practices to reduce the impact on the environment and local populations. Transparency It should be mandatory for companies to disclose the chemicals and their quantity as they are used in hydraulic fracturing fluids to allow the public to search for information about the chemicals used. In addition, disclosure level should vary from simple to more detailed disclosure and should include fracture date, location, well depth and operator, companies should be encouraged to include specific information about the ingredients injected into the well like the function of the product. Best ethics should include disclosure of all the chemicals used in fracturing fluid on both private and public lands. Transparency practices include public briefing on both operational successes and failures so as to enhance trust with the native communities and investors. Determination of water baseline Investors should have to search for water table assurance in areas with drinking water wells hence companies should obtain and disclose baseline water data and samples of residents’ water supplies should be taken for testing before, during and after fracturing activities to check for any changes. Baseline water testing also protects companies from litigation in the case of contamination by providing homeowners with evidence needed for fair and timely compensation. Use of green products An effective way to mitigate risks in the medium and long-term is by the removal of toxic components of the products, fracking companies should aim at reducing the quantity and toxicity of the chemicals they use. Consequently, this will decrease the risk profile of operations through the reduction of possibilities of water contamination and chemical predisposition of employees and also achieve an increased level of acceptance from the local communities. Efficient management of fluids To decrease production cost and avoid spills, proper fluid management practices should be embraced such as water recycling and efficient use of water to increase operations at the same time reduce water transportation, disposal, and treatment costs. Closed loop systems have been used instead of open pit storage since closed loop systems to a certain degree eliminates impacts associated with leaking storage ponds thereby reducing the release of volatile emissions to the air and prevents evaporation; hence, reducing the quantity of water needed for fracture operation. Due to fresh water stress and limitations, companies should explore the use of seawater and saline water; alternative fluids like nitrogen-based or freeze-thaw-based methods should be researched on since they may have a significant advantage in areas with limited water supplies. Embracing efficient use of drilling fluids will go a long way in reducing truck traffic and decrease costs associated with road renovations; also there will be a significant reduction in dust levels and local noise associated with trucks, therefore, improving relationship with the local communities. Leakages and air emission reduction Unintended emissions of vapors and gases from equipment’s and vessels designed to transport and store these volatile products should be minimized at all costs since these is a loss of revenue (Denver, 2013). Therefore, drilling companies should implement aggressive leak detection and remedy programs in order to reduce the amount of methane and VOCs emitted to air during storage and transportation and consequently increase revenues. Specialized equipment are used to separate hydrocarbons and gases from fluids that flow from the wells to the surface. There after separating the gas from water and thereby reducing its emission to the environment. Proper well designing An appropriate design should be embraced in drilling, well cementing and casing so as to meet regulatory requirements, the effectiveness of the cement seal has to be put to test with various hydraulic pressure test to ensure well integrity, best practices like acquiring cement bond logs to measure the presence of cement and cement quality bond should be embraced (Strauss, 2013). Despite the cost of the process, it provides the clear indication of proper cementing. Management of contractors Investors should seek assurance from companies on the reliability of contractors, more so those performing critical tasks like casing and drilling. Since inconsistent cementing, sloppy drilling practices and poor fluid management have caused major negative attention.in most cases these are due to improper construction of wells causing methane leakages, there have been cases of spillage of hydraulic fracturing fluid from storage vessels or during transportation (Hotaling, 2013). Therefore, Companies should have an on-site representatives to ensure the drilling process is conducted in accordance with operators’ standards though it has been noted that their presence is not always sufficient hence, in addition an, ongoing contractor, auditing and training should be essential. Engaging the community Engagement with the local community should begin in time and continue throughout the project to build positive local relationships for future growth opportunities. The company should involve the local communities in decision-making and by clearly defining how they plan to operate and by clearly demonstrating actions to meet the stated commitments (Strauss, 2013). By doing so, the company is likely to gain community acceptance and local approvals. Conclusion In conclusion in any stage of a business enterprise, there arises ethical issues some of which can be mistaken to be criminal offences. However, on close scrutiny they are ethical issues, business ethics relates to political economy which deals with the distributive consequences of economic actions and is the resultant distribution fair which are central ethical issues. Research indicates that gas and oil are mixed blessings to the states that are involved in fracking. This is because fracking has both positive and negative effects on the economic, environment and political life of the state. In order to counter the effects of fracking, many states have come up with regulations to control drilling. These will ensure economic gain and at the same time respect for the environment and humanity. References Denver, C. (2013). Tribal natural resources law. Denver, Colo.: CLE International. Claire, E. (2012). Fracking law: from land contract negotiations to environmental disputes. (2012). Wis.: NBI, National Business Institute. Graves, J. H. (2012). Fracking: Americas Alternative Energy Revolution. 2012. Print Hotaling, A. L. (2013). The moral layers of fracking: from basic rights and obligations to human flourishing. Missoula, Montana: The University of Montana. Strauss, S. (2013). Cultures of energy: power, practices, technologies. Walnut Creek, CA: Left Coast Press. Read More