Waste management compliance is important in every industry. The oil and gas industry, in particular, has a strong risk of waste emissions. Therefore, it’s vital for companies to understand how to manage drilling waste management, improve disposal of unwanted materials, and decrease unnecessary waste across the organization. 

Why Waste Management is Important in the Oil and Gas Industry

Waste management in the oil and gas industry is critical for a number of reasons. 

1. Protect Natural Resources

Oil and natural gas are vital natural resources. However, they are limited. By improving waste management practices, oil and gas companies can protect those natural resources and help them last longer. 

2. Reduce Pollution

The oil and natural gas industries may emit a number of pollutants, including methane, VOCs, and pollutant chemicals known or suspected to cause cancer. By improving waste management strategies, the oil and gas industry can decrease the pollutants released by its activities. 

3. Save Money and Resources

By improving waste management practices, many oil and gas companies find that they are able to protect money and resources, a critical element in the oil industry as prices remain volatile. In many cases, decreasing waste can help produce more output from the same resources the company already has. Or, in many cases, they can decrease the costs necessary to produce the same outcome. 

What are the 4 Types of Waste Management?

There are four main types of waste management practices. We’ve outlined the ones that most often impact the oil and gas industry.

1. Municipal Solid Waste

Municipal solid waste includes the general waste types produced by any business or, in many cases, homes. These may include paper and plastic products, metal and glass products, and other wastes generated from oil and gas containers. The oil and gas industry may generate solid wastes during the exploration process, due to the equipment used, during transport, or while storing oil and gas for future consumption. 

2. Industrial Solid Waste

Industrial solid waste can take a number of forms that may include higher overall levels of toxicity. In industry in general, including the oil and gas sector, many businesses use more dangerous chemicals and solvents than private homeowners typically use. In the oil and gas industry, that may mean different types of waste depending on the stage of the process.

For example, oil and gas exploration companies often deal with drilling fluids and cuttings that may be contaminated with chemicals. As a result, it’s impossible to return them back to the general water supply or to store them with general waste. 

3. Agricultural Waste and Residue

Most of the time, the oil and gas industry does not have to worry about agricultural waste, which is produced due to the byproducts of livestock or farming. However, residue from oil and gas production efforts may mingle with nearby agricultural waste in some settings. 

4. Hazardous Waste

The oil and gas industry may produce a great deal of hazardous waste during the normal course of operations. Those normal processes may lead to wastes that include:

• Arsenic
• Lead
• Chromium
• Mercury
• Cadmium
• Benzene

All these substances can be considered toxic when exposure occurs in high quantities. They may have an impact both on the environment and on the people interacting with them on a regular basis. As a result, the oil and gas industry must take several steps to ensure the proper disposal of those dangerous substances. 

Waste Disposal Regulations in the Oil and Gas Industry

The disposal of waste in the oil and gas industry is regulated heavily at both the federal and state levels. Because of the heavy amount of waste produced by the drilling and production processes, oil and natural gas companies may need to carefully consider their environmental impact before, during, and after drilling.

The RCRA

The Resource Conservation and Recovery Act helps regulate underground storage tanks and the disposal of solid or hazardous waste. It creates regulations at the federal level and encourages states to create their own individual regulations. 

Hazardous waste, under the RCRA, may include:

• Ignitable waste
• Corrosive waste
• Toxic waste
• Acute hazardous waste
• Reactive waste

The RCRA has a “cradle to grave” regulation scheme that regulates the production, use, and disposal of hazardous waste at every stage of the process. At the disposal level, it prohibits anything that may discharge, inject, spill, or leak into the air, water, or ground. That means that hazardous waste from oil and gas production needs to be disposed of in proper landfills, rather than in open dumps. 

State Permits

In most states, oil and gas companies, like other companies, must have a state permit to dispose of hazardous waste. Each state has the right to decide what those permits include and how they are created. In many cases, oil and gas companies, due to their economic and energy-related necessity, are exempt from many of the processes required of other businesses and industries. However, each state sets its own regulations, which may vary dramatically from one to the next. 

Voluntary Management Practices

The EPA also issues specific voluntary management

• Liners
• Leak detection systems
• Maintaining and using a pit for waste disposal
• Regulations for the transportation of waste
• Secondary protection of water tanks used in the cooling or production process

By following the best practices for voluntary management, oil and gas companies can substantially reduce the environmental impact due to hazardous waste produced throughout the process. Following those best practices can also help protect the company in the future.

Waste management for the oil and gas industry can be particularly challenging. By following essential industry regulations and best practices, however, oil and gas companies can reduce their impact, decrease waste, and ultimately create a more successful return on their investment.

Today, the challenges faced by the oil and gas industry are considerable. Effective business leaders and managers must thoroughly understand them to determine and implement the most effective risk management strategies for their company. There are several commonly recognized best practices for risk management in the oil and gas industry. However, no one-size-fits-all approach will mitigate all actual and potential vulnerabilities. Each company is unique and requires its own customized risk assessment checklist that, at minimum, addresses the following areas:   

• Supply, demand, and market dynamics
• Worker health and safety
• Environmental impact
• Cybersecurity

A broad understanding of these vulnerabilities can help businesses pinpoint specific areas they need to address.

Supply, Demand, and Market Dynamics

The market for oil and gas is often quite volatile. Sudden changes in regional economies, wars, or public health can dramatically increase or decrease the supply or demand for oil in a matter of days. And when these shocks occur, the entire industry – including equipment, transport, storage, refining, training, marketing, and software businesses – feels the effects.

Moreover, the industry is highly regulated in most parts of the world, with new laws and regulations expected to continue to emerge. Additionally, many countries are moving to curtail greenhouse gas (GHG) emissions to combat climate change. As a result, nations and multinational organizations are drafting and implementing regulations which will continue to affect both the supply of and demand for oil and gas. And some industries, most notably the automobile industry, are shifting production away from gas-powered products to those powered by alternative fuel sources.

A single weather event in a key region could affect a company’s output or demand. So, it’s essential for oil and gas business leaders to carefully assess all the elements of their supply chain and customer base. It’s just as critical to monitor events continuously. This approach allows adjustments to be made, and new plans developed in real-time to help navigate the market’s inherent volatility.

Furthermore, oil and gas prices in commodities markets are dynamic. That means oil and gas companies must hedge their risks using certain investing strategies. Leveraging derivatives, such as futures, swaps, forwards, and options, can offset the losses a company may face that see a sudden drop in demand. However, these strategies come with their own risks and must be executed carefully.

Worker Health and Safety

While the use of machines and automated tools has helped increase worker safety considerably, oil and gas extraction is still quite dangerous. The work is long, and the working conditions are difficult. And no matter how sophisticated and rugged the machinery is in use, it can break down, resulting in injured workers, making an extraction even more difficult.

Oil and gas companies must design and implement solid worker health and safety plans that cover every aspect of their operation. Doing so is not just a matter of morality and productivity. The federal government requires it. Failing to comply with safety standards exposes companies to serious legal liability.

Part of any effective health and safety plan includes continuous monitoring of worksites, equipment, and conditions. Doing so helps managers identify and remediate safety issues before those issues cause equipment damage or result in injuries. Federal regulations also require businesses to report workplace safety incidents that result in illness or injury. Failing to comply or complying inconsistently introduces considerable legal risks.

Environmental Impact

Broadly, the energy sector has an outsized impact on the environment relative to most other industries. Oil and gas extraction, refining, and distribution result in GHG emissions. However, industry operations also come with the risk of oil spills, the need to dispose of hazardous waste, and other effects. And even if a vendor is directly responsible for an accident, it can be hard for a prominent oil or gas company to avoid taking the blame in the eyes of the public.

There’s also increasing scrutiny of whether companies operate sustainably. What once were esoteric and internal business processes are now regularly dissected on blogs and websites. Some companies have found it more difficult to do business because they directly or indirectly have a substantial negative impact on the environment.

Cybersecurity Risks

Of the four areas of risk management outlined, cybersecurity is the most recent. However, it also potentially poses the greatest risk. Cyber threats continue to grow in scale and scope, threatening businesses and organizations of all sizes and industries. Criminals will target any business from which they believe they can extract a ransom. But the oil and gas industry is also vulnerable to hacking attempts from more than just thieves.

Nation-state and non-nation-state actors have increasingly targeted the oil and gas industry and other critical infrastructure industries for geopolitical advantage. Some attacks are tied to armed conflicts, as oil and gas are critical wartime supplies. And in a global market, some hackers seek trade secrets on behalf of foreign interests.

Oil and gas companies have embraced new digital operational equipment that leverages robotics, machine learning, automation, and the Internet of Things (IoT). With that transformation comes new vulnerabilities. While business efficiency and productivity improve with digitization, potential access points increase. It’s true that hackers can steal corporate data in other industries. However, hackers infiltrating oil and gas networks can also deliberately or inadvertently cause significant physical and environmental incidents. These directly compromise worker safety and the environment.

Companies across the globe are in a fierce talent war for cybersecurity professionals. Oil and gas companies must also recruit and retain talented staff who can stay on top of emerging threats within the context of a unique and highly dynamic sector. These threats do not include outside actors. Instead, they involve internal threats from negligent or disgruntled employees.

Risk Management in the Oil and Gas Industry

Risk management in the oil and gas industry requires business leaders and managers to understand them and use the appropriate tools to evaluate them. Oil and gas companies need the right risk assessment checklist to help them evaluate the unique threats their firm faces. The GoCanvas team has created an effective risk assessment checklist to help you comprehensively assess your worksites.

Liability issues stemming from worker injuries aren’t the only worker health and safety issues leaders and managers must address. Some worker safety issues are a direct result of worker stress. And in an industry distinguished by hard work under tough conditions, businesses must evaluate and mitigate employee stress to mitigate the risk of workplace accidents.

GoCanvas also has developed a stress managers risk assessment tool that can help you gain invaluable insight into how your employees are faring and help you manage risk.

These are just two of the tools that GoCanvas offers business leaders and managers in the oil and gas industry. Our products are aligned with federal OSHA standards and easily customizable to fit your business needs. Visit GoCanvas to learn more about safeguarding your business from market, operational, and organizational risks today.