Global Environment and Operations Strategy: RasGas - Case Study Example

Global Environment and Operations Strategy: RasGas of the Table of Contents Introduction 3 Approach towards the environment 3 Efficient energy use 4 Greenhouse gas emissions 5 Flaring 6 Water 7 Waste management 8 Integrating sustainability and operations 9 Conclusion 11 References 14 Introduction RasGas Corporation Limited is one of the largest firms of Qatar operating in the oil and gas sector. The company manufactures Liquefied Natural Gas (RasGas, 2013). This is essentially a joint venture between the government of Qatar and some of the major oil and gas companies of the world such as Exxon Mobil. The company was established in the year 2001. After Qatargas, RasGas is the largest producer of Liquefied Natural Gas (LNG). The company operations are spread across seven trains in Ras Laffan Industrial City. The LNG trains of the company have a net capacity of 36.3 million tones production capacity annually (RasGas, 2013). RasGas also accounts for 10% of the global share in helium production. The company supplies LNG to nations in the Middle East, Europe and Asia. In the coming years, the company plans to extend its distribution network by supplying LNG in North American nations as well. Since the company manufactures LNG, facilities and plant locations are considered having highly hazardous environments. The company has established rigorous safety measures at all its operations and manufacturing centers. It also ensures that environment compliance regulations are met (RasGas, 2013). Approach towards the environment RasGas believes that sustainability is an integral and an indispensible objective associated with all the activities which are carried out in the firm (RasGas, 2013). The company associates its business success with meeting the goals relating to sustainability. The company essentially understands the needs of developing clean, reliable and affordable energy. Meeting the global demand for clean energy as well as ensuring minimum impact upon the environment is considered to be highly essential for the company. Environmental risks and climate change are required to be addressed so that future generations are able to follow a sustainable path of living (Kagiannas, et al., 2003). Efficient energy use RasGas supports the initiatives of the nation of Qatar in respect of efficient energy utilization. The oil and gas sector of the nation is responsible for generating half of its green house gases. Qatar petroleum plays a highly important role in controlling carbon emissions in the oil and gas sector as a whole. RasGas focuses upon minimization of loss of energy due to any redundant activity and through minimization of flaring. The organizational goals of achieving minimization of costs and maximization of product availability facilitate achieving environmental goals. RasGas essentially understands that consumer use of energy fuels leads to increase in emissions. In the future, it is expected that the demand for LNG products will noticeably rise. This is due to the aspect that burning other types of fuels leads to higher carbon footprint than LNG. LNG burning causes less carbon emissions. It also produces lesser localized pollutants like sulphur dioxide (Kolluru, Buchak & Brinkmann, 2003). Figure 1: Energy use comparison 2006-13 (Source: RasGas, 2013) On the usage of renewable energy sources, the company has installed 22 solar powered street lights and the development of 25 solar powered towers which were purchased for meeting shut down activities (RasGas, 2013). Comparison of the energy consumption of RasGas reveals that the company uses relatively lesser power than most of the LNG producers operating in the industry. This is a significantly strong achievement for RasGas in meeting their environmental objectives (Jacoby, 2012). Greenhouse gas emissions RasGas operates an acid gas injection scheme which facilitates storing CO2 and H2S thereby reducing emissions to a large extend. Approximately 1 million tones of CO2 are injected into a saline aquifer on an onshore reservoir formation (RasGas, 2013). The reservoir is monitored using microgravity surveying techniques, considered as one of the best techniques of monitoring. CO2 export for other industrial purposes is also one of the most strategic ways of meeting sustainability related needs. In order to control and normalize the manner in which the greenhouse gases are emitted during production activities, the company benchmarks its performance with other firms of the industry. Greenhouse gas emissions totaled 17.9 million tonnes of carbon dioxide in the year 2013 as compared to 18.7 million tonnes in 2012. Reduced wastage and greater monitoring of activities has facilitated proper management of harmful emissions (AlJaam, et al., 2011). Figure 2: GHG comparison 2006-13 (Source: RasGas, 2013) Flaring Flaring causes excess gas emissions, contributing excessively towards increasing the green house gases existing in the environment. Flaring contributes to about 12% of the net green house gas emission in Qatar. The company has developed a new five year plan for reducing flaring emission by almost 1.26% (Navickas & Kontautiene, 2013). Figure 3: RasGas flaring (Source: RasGas, 2013) In order to control the emission of gases from flaring, the company is seen to retrofit existing systems so as control the release of nitrogen oxide. Optimization of fuel gas recirculation and leak detection and repair systems are steps which have been taken by the firm for controlling volatile organic compounds in the atmosphere through flaring (Grant, 2003). Water Water management is a highly important issue in Qatar as the nation faces a shortage in freshwater availability. The company essentially believes that onshore water usage can be effectively controlled (RasGas, 2013). In order to minimize the consumption of freshwater, the company uses a combination of different systems for treating chemical water, sewage water and oily water. The water is not only used for meeting production needs but is also utilized for irrigation purposes. Using techniques such as reverse osmosis and membrane bioreactor helps in reducing the consumption of fresh water further. RasGas utilizes the desalinated water in a number of its operations and particularly for steam generation. One of the primary sources of water for the company is sea water used for cooling processes. Additionally the company carries out a number of research works for further estimating ways in which water consumption can be reduced (Wagner, Schaltegger & Wehrmeyer, 2001). Waste management RasGas was successful at implementing 58% waste recycling in its operations (RasGas, 2013). The firms waste management systems included collection, treatment, reuse, recycling and storage of items. Items were recycled, reused or discarded based upon their importance in the operations cycle. Incineration and landfill are also used by RasGas for treatment of wastes. The company was awarded by Qatar Petroleum in the year 2013 for achieving significant benchmarks in the oil and gas industry in relation to waste management (RasGas, 2013). It is important that the company remains successful at treating its wastes in a successful manner so that biodiversity is not affected in any manner. It is particularly important to treat chemical wastes which adversely impact environment. The company had introduced new sludge management equipment in the year 2013 that had facilitated the company to reduce waste storage and increase recycling by almost 150% (RasGas, 2013). Figure 4: Waste generation comparison (Source: RasGas, 2013) Integrating sustainability and operations Most firms find it challenging to align sustainability goals with their operations. In the oil and gas sector of Qatar, companies are required to meet environmental needs foremost and align organizational goals with that of the needs of the environment (Johansson, et al., 1993). Through integrated efforts, RasGas tries to achieve its environment related goals. The company is seen to closely work with shareholders and other important stakeholders to formulate different plans of action in meeting environment related needs. This helps to strengthen its relations with associated business partners. Value additions along the supply chain of the company are done on the basis of the needs of the environment. The strategies of operations are formulated in a manner such that minimum impact occurs upon the environment (Omer, 2008). At RasGas all the production and distribution activities are carried out on the basis of four important strategic choices. These aspects are shown in the following figure. Figure 5: Operations strategy plan of RasGas (Source: RasGas, 2013) Meeting the needs of the people RasGas collaborates its operational strategies with theie Qatarization goals (RasGas, 2013). The company believes that it is essential to serve the community not only through its products and services but also through the manner in which it operates. This strategy includes providing employment opportunities and ensuring that workplace environments are safe and facilitates growth. The layout of plants and work locations of RasGas are designed in a manner such that they not only facilitate meeting the needs of value chain but also help in maintaining regular flow of activities (Omer, 2008). Fulfilling safety, health and environmental needs The company in order to maintain a high degree of safety at its facilities the company has developed its own golden rules which are institutionalized and strictly followed by all members of the organization. These rules are essentially incorporated in the company’s code of conduct. The company has established continuous communication tools across all its production units so that safety measures can be checked. Suitable initiatives have also been taken by the firm for generating adequate awareness regarding safety measures across all lines of operations. The company also ensures that its activities have minimum impact upon the environment. This requires the application of the best in clean technologies. Special efforts have been taken by the firm to minimize flaring (Navickas & Kontautiene, 2013). Optimization of costs Enterprise risk management (ERM) techniques are essentially used by the company for reducing wastage and attaining maximum efficiency of costs (RasGas, 2013). ERM techniques have been established along the value chain of the company. Timely internal audits are also conducted to ensure that all activities meet the benchmarks set by the company. Reliable and timely delivery of products and services The company is seen to have developed its value chain that is based on continuous improvements. The systems of operations are flexible towards change and focuses upon minimization of error through immediate detection. Lost capacity is optimized through planned volumetric downtime. Project scheduling is done in a manner so that on time delivery to clients is facilitated (Kolk & Levy, 2001). Conclusion As energy needs across the world rise, it is becoming more and more important for oil and gas firms to develop techniques which meet quality, environment and costs related needs. Additionally it is also essential to educate workforce regarding the importance of sustainable practices. Apart from concrete measures taken within the firm, RasGas is also seen to conduct a number of seminars and programs which spreads the importance of environment conservation amongst students. The practices followed by RasGas are an important lesson for other oil and gas companies. The company has been able to operate in a highly sustainable manner and create minimum impact upon the environment. The company understands that a large amount of investments are required to be made in human resource so that it is possible to develop skilled workforce which helps in the meeting of sustainability related goals. The deteriorating environmental conditions have made it essential for firms to integrate sustainability with all its operations. Meeting environmental goals must be an essential factor while constructing the value chain framework. At each level of production, the company must be able to achieve waste minimization, reduction in costs and at the same time add value to the product being manufactured. The oil and gas sector is seen to invest hugely in developing technologies which facilitate reduction of costs, value enhancement, achieve high quality standards and most importantly have minimum footprint upon the environment. One of the prime challenges faced by oil and gas firms of Qatar is in respect of minimization of the use of water. Most firms are required to use treated water for their production activities, which facilitates conservation to a large extend. Achieving growth alongside of meeting objectives related to sustainability becomes essential. Additionally environmental goals must be integrated with the goals of the stakeholders of the organization. Stakeholders are required to be informed regarding the importance of meeting environmental needs. This ensures transparency and facilitates participation of stakeholders in important functions of the organization. RasGas is seen to join hands with the government of Qatar for meeting the needs of Qatarization. The Qatar National Vision 2030 sets out the framework which oil and gas organizations are required to follow. The vision especially regulates the use of hydrocarbons. The purposes of such initiatives are to meet both the profitability and environmental needs. Considering the current global environmental are natural resource conditions, it is essential for firms to incorporate sustainable development in their corporate goals. Integrating environmental goals in each step of operations therefore becomes essential. On the basis of the studies conducted upon RasGas and the initiatives taken by the company to improve their environmental objectives, it can be understood that knowing the nations objectives in respect of the environmental is essential. RasGAs combines its efforts of sustainability with that of the government and the steps taken towards Qatarization. The oil and gas sector must also encourage consumers to use renewable sources of energy more widely. It must take efforts towards providing strategic solution to industries and commercial firms to implement value chains which are based on renewable sources of power. References AlJaam, J. M., Rahama, A., Sabri, A. A. & Abbasi, M. H. (2011). The Qatari Environment Friendly Web Portal. Journal of Communication and Computer, 8(7), 536-544. Grant, R. M. (2003). Strategic planning in a turbulent environment: evidence from the oil majors. Strategic management journal, 24(6), 491-517. Jacoby, D. 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The interaction between corporate social responsibility and competitiveness during the economic downturn. Economics and management, 18(1), 58-67. Omer, A. M. (2008). Energy, environment and sustainable development.Renewable and sustainable energy reviews, 12(9), 2265-2300. RasGas. (2013). Embracing our responsibilities. Retrieved from: http://www.rasgas.com/Files/RasGas_Sustainability_Report_2013_(April_2014).pdf Wagner, M., Schaltegger, S. & Wehrmeyer, W. (2001). The relationship between the environmental and economic performance of firms. Greener Management International, 2001(34), 94-111. Read More