Oil and gas producers wanting to belong to the Canadian industry’s most powerful association will now have to prove they look after the environment as well as the bottom line.
The Calgary-based Canadian Association of Petroleum Producers has made it mandatory that all new member companies participate in CAPP’s environment, health and safety stewardship program.
CAPP’s current member companies also must join the stewardship program by Jan. 1, 2003 to retain their membership.
“It’s a fairly significant change in our policy,” says Gary Webster, the program’s manager at CAPP.
“It shows that the stewardship initiative is alive and well at CAPP, and that our members are going to be taking it seriously or they shouldn’t be thinking about being members of CAPP,” he says.
CAPP is the upstream oil and gas industry’s biggest and most influential lobby organization.
Its 140 member companies (plus 120 associate members) represent more than 97 per cent of the crude oil and natural gas produced in Canada.
Environmentalists welcomed the decision, made last week by CAPP’s board of governors.
“I think companies realize that their public image is very important,” says Mary Griffiths, environmental policy analyst for the Pembina Institute, an Alberta-based environmental policy research group.
“And it’s not just a question of image. It’s following through and showing they are acting responsibly.”
CAPP’s decision “sends a signal” to the entire energy industry that environment, health and safety “are things which every responsible company should be making an active part of their way of doing business,” Griffiths says.
Oil and gas producers are joining a trend among resource industries to raise the profile of their efforts to protect the environment while still pursuing development.
The Forest Products Association of Canada, which represents some of the country’s major lumber and pulp and paper producers, decided earlier this year that to qualify for membership, companies must obtain third-party certification showing their forest management practices are environmentally sound and sustainable.
Also, chief executives from 28 global mining firms meeting in Toronto last month endorsed a plan by the International Council of Mining and Metals to create a sustainable development code and implement voluntary environmental certification for member companies.
CAPP started its stewardship initiative in 1999 as a voluntary program.
Participating companies design and implement environment, health and safety management systems.
They commit to continually improving their performance in these areas, and to regularly reporting on their progress to the public, the industry and government regulators.
Companies in CAPP’s program typically start at the “bronze” level of performance, by signing on to the stewardship initiatives and consulting effectively with stakeholders.
Firms can work their way up to “silver” by reporting their performance data against benchmark measures that represent the best standards being practised in the industry.
The companies can progress to “gold” by conducting an internal audit of their environment, health and safety management systems. “Platinum” – the highest standard – is attained when companies undergo an independent, external audit of their systems.
Several major corporations achieved platinum performance in 2001, according to CAPP’s annual stewardship progress report.
They include BP Canada Energy Company, Canadian Hunter Exploration Ltd. (since purchased by Burlington Resources), Canadian Natural Resources Limited, Conoco Canada Limited, Nexen Inc., Shell Canada Limited, Suncor Energy Inc., Syncrude Canada Ltd. and Talisman Energy Inc.
Shell Canada, which adopted its own sustainable development policy in 1990, joined CAPP’s stewardship program early on because its goals and activities “align with our values and our own practices,” says company spokeswoman Jan Rowley.
“Obviously, if industry in general performs better and people feel more comfortable, then all of the members of the industry benefit,” Rowley says.
“So it’s in our collective best interest to encourage our other peers and competitors alike in the industry to take this up.”
Stewardship principles have helped drive such specific initiatives as the oilsands sector reducing its energy consumption per cubic metre of production by 45 per cent between 1980 and 2000.
Oil and gas producers have also cut in half the 1.3 billion cubic metres of flared “solution” or non-commercial gas since 1996. On the other hand, producers’ total greenhouse gas emissions (blamed for global warming) rose from about 35.8 million tonnes to 42.4 million tonnes of carbon dioxide or equivalent gases between 1998 and 2000.
Webster says that more than half of CAPP’s 140 member companies now voluntarily participate in the stewardship program. They include all 22 of the biggest majors in the association and all but a few of the 25 or so medium-sized member firms.
Since February of this year, CAPP has been making a concerted effort to encourage smaller member companies to come on board.
“Once people hear about what it is and get to better understand it, then very few of them reject the idea,” Webster says.
Several of CAPP’s associate members have also joined the program, including Pembina Pipeline Corp., Alliance Pipeline, NOVA Chemicals Corp., and environmental services firms Alpine Environmental Ltd. and HAZCO Environmental Services Ltd.
Griffiths says it will be important for member companies entering the program to go beyond the bronze level within a couple of years or so, and for CAPP to continue reporting publicly on the progress in each category.
“Obviously, the proof is in the pudding,” Griffiths says.
“I would say this is an excellent first step, and we would encourage them to proceed and improve.”