Abstract

Effective design, introduction, and implementation of an environmental program in an oil and gas company require an understanding of the forces driving that company’s environmental actions. It is crucial that these driving forces and their relative importance be identified so that the environmental program can focus on relevant issues.

Driving forces affecting the oil and gas industry include liability (criminal and civil), regulatory regimes (increasing regulation or self-regulation), industry standards, cost-effectiveness, financial requirements, accounting practices, corporate image, and requirements by partners.

Case studies from western Canada indicate that liability and regulatory requirements are perceived by managers to be the main forces driving environmental management initiatives in petroleum companies. Financial requirements and accounting practices will increase in importance as financial institutions and investors become more familiar with environmental management and as environmental accounting becomes part of Generally Accepted Accounting Practices.