Ehstoday 1217 Globalmoneyfinance

Oil Industry’s EHS Spending on the Rise

June 6, 2013
A new report from Lux Research indicates that environmental, safety and health spending in the oil and gas industry could rise 60 percent to $56 billion by 2030.

As recent high-profile environmental disasters have prompted increased regulatory scrutiny in the oil and gas industry, environmental, health and safety spending in this industry is expected to increase from $35 billion in 2011 to $56 billion by 2030, according to a new report.

The report from Lux Research, “Using Technology to Drive Improvements in Health, Safety and Environment,” suggests that this 60 percent increase in EHS spending could lead to a reduction in the rate of incidents within the oil and gas industry.

“With producers shifting to extract resources from increasingly harsh environments, new technologies and drastic innovation are required to improve [EHS] practices and make the production and transportation of hydrocarbons safer,” said Rick Nariani, Lux Research analyst and the lead author of the report.

Lux Research analysts studied oil producers’ approach to EHS issues. Key findings include:

  • Upstream producers now bear the brunt of EHS costs, as they spend $0.70 per barrel of oil equivalent (BOE) compared to midstream operators that spend less than $0.01 per BOE. However, as midstream companies now must navigate past interest groups and journalists before every major project, they too will need to invest accordingly.
  • The United States will continue to dominate spending in EHS. Over 39 percent of all EHS expenditure is in the United States, where spilling a single barrel of oil currently costs producers $8,000 in penalties. Regulations from EPA and others will keep the United States the largest EHS market for the foreseeable future.
  • Leak containment and detection is a key market.

This report is part of the Lux Research Exploration and Production Intelligence service.

Sponsored Recommendations

ISO 45001: Occupational Health and Safety Management Systems (OHSMS)

March 28, 2024
ISO 45001 certification – reduce your organizational risk and promote occupational health and safety (OHS) by working with SGS to achieve certification or migrate to the new standard...

Want to Verify your GHG Emissions Inventory?

March 28, 2024
With the increased focus on climate change, measuring your organization’s carbon footprint is an important first action step. Our Green House Gas (GHG) verification services provide...

Download Free ESG White Paper

March 28, 2024
The Rise and Challenges of ESG – Your Journey to Enhanced Sustainability, Brand and Investor Potential

Free Webinar: Mining & ESG: The Sustainability Mandate

March 28, 2024
Participants in this webinar will understand the business drivers and challenges of ESG and sustainability performance, the 5 steps of the ESG and sustainability cycle, and prioritized...

Voice your opinion!

To join the conversation, and become an exclusive member of EHS Today, create an account today!