Gas or Grouse

1. What are the systemic, corporate, and individual issues raised in this case?
SYSTEMIC ETHICAL ISSUES
There are three matters that should be taken into consideration. The first one is economic system,
because first it gives employment opportunity, tax and royalty government to government, as well
as reduces the need to import energy supplies from overseas. The second is political-social-legal
system; it reduces US’s reliance on foreign energy supplies, so it increases international political
bargaining position. The third in environmental system; the major issue here is about the declining
numbers of wildlife, especially sage grouse, because of gas drilling and basically any production
activities.

CORPORATE ETHICAL ISSUES

Operationally, drilling pad does take a big space to support drilling rig in which it brings impact to
wildlife habitat. Financially, there is a lacking of ability to do activities due to seasonal activity; high
cost needed for drilling activity in winter months. Lastly, it is a field that needs to keep up to date to
new technology, and costs too much.

INDIVIDUAL ETHICAL ISSUES

Jim Sims, the negotiator for Questar, suggested ‘funding scientific studies’ that would be designed to
show that sage grouse wasn’t endangered. Dru Brower, the vice president of the petroleum
association in Wyoming, kept the species at Pinedale Mesa out of the ‘endangered species list’. And
for residents in Pinedale Mesa, they still welcome gas companies because they bring them jobs
opportunity, which means bringing revenue, and also boost local economy.

Systemic issues: Questar is a company and it knows that every mining activities in Mesa will affect
the ecological environment. But BLM did nothing since Questar had damaged the local environment.
And we know many gas companies have special relationship with governments. Corporate issues:
Questar has destroyed the environment when the mining operation was begun. Individual issues:
The people who live in Pinedale Mesa believe the drilling activity bring numerous benefits, including
jobs, revenues, and local economy. So they welcome the gas companies go to there.

a. Systemic Issues

The government has to look up in the macro view. Not just from the economical reasons, the
government has to look from the ecological point of view. Seeing the fact that Questar drilling has
benefited the local economies as well as increasing welfare, there are also concerns about the
endangered sage grouse and other wildlife population in the surrounding area. In addition,
with the rising need of clean energy, the natural gas drilling has also become very important.

b. Corporate Issues
The issues rising within Questar is how the company should be able to meet the demand of the
natural gas without having to be sued over some environmental matters. Moreover, as the drilling
operations are forced to stop, next to the rising costs, there would be more layoffs, of which would
damage the employees trust and thus creating more problems.

c. Individual Issues

 Jim Smith, a former communications director for President George W.Bush

Energy Task Force, tried to lobby the Bush administration to keep the grouse

off the endangered species list, encouraged "grass-roots opposition" to

"provide political cover", and suggested "funding scientific studies" to show

the bird was not endangered.

 Dru Bower, vice president of the Petroleum Association of Wyoming said that

“[endangered species] listings are not good for the oil and gas industry, so

anything we can do to prevent a species from being listed is good for the

industry.”

 George W. Bush, the president of USA, said that new sources of domestic

energy are key to the country's economic future, he came to power seeking to

unsnarl bureaucratic red tape, speed government's issuance of permits and

open up as much public land as possible. Once in office, he attacked Clinton-

era proposals to create national monuments and tried to open 58 million acres

Clinton had closed to road building, logging and drilling

Systemic Issues

Political-Social-Legal Issues

• Reducing US’s reliance on foreign energy supplies

• Increasing international political bargaining position

• bargaining power Enhancement of the Energy company coalition on the Government

Economy Issues

• Employment opportunity

• Tax and royalty revenue to government

 • Enhancing local economy booming

• Reducing the need to import energy supplies from abroad

Environmental Issues

• Declining numbers of wildlife species such as: Sage Grouse, Mule Deer, Pronghorn antelope due
to gas drilling & production activity.

• Damage in Pinedale Mesa Landscape ecologically and aestethically

• On the other side, Gas is more environment friendly compared to coal, oil, etc.

Corporate Issues

Operational Issue

• Drilling pad taking a big space to support drilling rig and other equipment

• Access roads, piping networks and tanker truck traffics impacting wildlife habitat

Financial Issue

• Drilling activity suspension in winter month is costly

• Ineficiency due to seasonal interruption activity

• New technology cost is costly

New Technology

• Application of Directional Drilling

• Second pipe system for liquid waste

Individual Issues

Jim Sims

• Negotiator for Questar & other companies that formed coalition to do lobbying to the Government.

• Suggested “funding scientific studies” that would be designed to show that the sage grouse was not
endangered

Dru Bower

• Vice president of the petroleum association in Wyoming

• Wants to keep the species at Pinedale Mesa out of the “endangered species list”. He says:
“Endangered species listings are not good for the oil and gas industry. So anything we can do to prevent
a species being listed is good for the industry”
Systemic Issues

Economy

 Employment opportunity

 Tax and royalty revenue to government

 Reducing the need to import energy supplies from abroad

Political-Social-Legal

 Reducing US’s reliance on foreign energy supplies

 Increasing international political bargaining position

 Bargaining power enhancement of the energy company coalition on the Government

Environmental

 Declining numbers of wildlife species such as: Sage Grouse, Mule Deer, Pronghorn antelope due
to gas drilling & production activity.

 Damage in Pinedale Mesa Landscape ecologically

 Gas is more environment friendly compared to coal and oil.

Corporate Issues

Operational

 Drilling pad taking a big space to support drilling rig

 Piping networks impacting wildlife habitat

Financial

 High cost for drilling activity in winter month

 Inefficiency due to seasonal interruption activity

New Technology

 Application of Directional Drilling

 Second pipe system for liquid waste

Individual Issues

Jim Sims
  Negotiator for Questar

 Suggested ‘funding scientific studies’ that would be designed to show that the Sage Grouse was
not endangered

Dru Brower

 Vice president of the petroleum association in Wyoming

 Keep the species at Pinedale Mesa out of the ‘endangered species list’

Residents

 Residents in Pinedale Mesa welcome gas companies

 Bring benefits: jobs, revenue, and local economy

2. How should wildlife species like grouse or deer be valued, and how should that value be
balanced against the economic interests of a society or of a company like Questar?
Maintain their natural habitat. Protect the existing population, prevent from extinction, facilitate
them to breed. If Questar have high awareness for Concerning with environment impacts, this value
can be balanced against the economic interests. For the principles, the environmentalist said that
technological improvements should not come at the sacrifice of important safeguards for
Wyoming's wildlife heritage. And we have protection law of wildlife also.

It is extremely difficult to put on wildlife species into monetary valuation. Some of available research
even mentioned that one of the ways of valuating the wildlife species is to count on the effort
made on the conservation. The higher the conservation cost is, the higher is the monetary
value. But however, the wildlife valuation isn’t all about monetary aspects. There is an
environmental balance needs to be concerned as well. Basically, valuing them isn’t an easy job.
However, when it deals with company’s economic interest such as Questar, there should be an
effort by the company itself to both reserving the environment as well as providing some
conservation funds to help the work of conservation.

By legalizing environmental laws and company policies in maintaining the natural range of the
wildlife, which should be allowed to develop on their own with as little interference from human as
possible. It could protect the existed population and also prevent extinction to happen.

Proper wildlife management and conservation

 Wise use of nature and nature preservation in their management strategy
 To ensure protection of resource values and resource uses
 Wild places should be allowed to develop on their own with as little interference from humans
as possible
 Ecological ethics must be in taken account in any business activity of the company
 Legalization of environmental laws and company policies

What principles or rules would you propose we use to balance the value of wildlife
species against economic interests?
Utilitarianism

 Pain is an evil whether it is inflicted on humans or animals.

 Involve this consideration in management decisions.

3. In light of the fact that natural gas reduces the U.S.’s undesirable dependence on foreign
oil and the fact that natural gas produces less greenhouse gases than coal, oil, and other
fuels, should Questar continue its drilling operations? Does the environmental impact of
Questar’s drilling operations imply that Questar is morally obligated to stop drilling wells
on the Pinedale Mesa? Explain.

Basically, Questar is morally obliged, but it is definitely not the only one having the obligation. The
Questar company should continue their innovation for drilling, so the environment and animal
around Questar can be survive and have a chance to breath.

This is the dilemma between energy source and environment responsibility. I think Questar should
not stop exploit gas but it can stop continually drilling operations. And I also think if Questar's
operations damage too much to the environment, the government will prohibited the operations
forcibly to protect the environments.

Consideration about moral Responsible:

• Person caused/helped cause the injury or prevent when they could
• Person did so knowing what they are doing
• Do so in own free will
Declining Number of wildlife species, Damages to Nature & Wildlife habitat, Operational waste:
drilling sediments, etc, are the factors for Questar to be Morally Obligated to Stop Drilling

Bureau of Land Management has already imposed several restrictions on Questar’s operations on
the mesa to protect the wildlife species living on the mesa especially sage grouse. The restrictions
are as follows:
 Roads, wells and other structure had to be located a quarter mile or more from grouse
breeding ground and at least 2 miles from nesting area during breeding system
 No drilling activity during winter
So, ethically Questar Operation should obey the BLM conditions for their drilling activities. Because
on the other hand, to fulfill the energy demand of the US, Questar Corporation could not just break
off the drilling activities.
The government will take necessary action if Questar doing their operations which is not allowed by
the government and it brings too much impact or critical damage to the environment until causes
some critical issue such as extinction of wildlife species, disaster, and so on.

Advantages

 Provide jobs for the society,

 Increase the government revenue from tax and royalty.

 Economic growth for local region

 Supplying clean energy and environment friendly compared to oil, coal, and so on.

The restrictions imposed by BLM is :

 Roads, wells and other structure had to be located a quarter mile or more from grouse breeding
ground and at least 2 miles from nesting area during breeding session.

 No drilling activity during winter.

4. What, if anything, should Questar and the other companies be doing differently?
Questar Corporation should be doing differently towards the drilling pads. They also should
have high deliberation for the demand in winter because based on BLM restrictions they are
not permitted to do any drilling activities during winter.

What should the company do Differently? Drilling Process, Production and distribution, and
Environmental conservation, waste management leads to Drilling where Pollution
Management is Fulfilling, National, Energy, and Supplies. And in terms of Environment is
Optimum Conservation on wildlife and physical environment in a Balanced / win win
solution

They should follow the requirement of governments, use the new technology aim the
drilling operations and damage the environments as little as possible.

From beginning they should consider the solution of the impact for environment and
animals around Questar.
5. From an ethical point of view, was alternative (4) the best option among those from
which the BLM chose? Is another alternative better from an ethical point of view?
Explain your answer.
Yes, I think alternative (4) is the best option among all from which the BLM chose. Because
in alternative (4), it is stated clearly into the details of how the drilling activities should be
located and permitted to operate. And one of the good points that no other options has is it
requires the companies to make annual review of wildlife impacts which makes it easy to
check, monitor and control. It also requires the companies to establish a fund to monitor
wildlife and to pay for the cost of mitigating any impacts on wildlife that monitoring
detected.

Alternative Decisions from BLM

1. Continue to prohibit winter drilling and allow no additional wells
2. Allow winter drilling and allow 4399 more wells on a maximum 600 drilling pads located
within a large core area in the centra part of the mesa
3. Allow winter drilling and 4399 more wells on a maximum 600 pad plus: confine drilling to
specific parts of the core area and prohibit drilling or disturbances of any areas that were
“crucial winter ranges” for mule deer & pronghorn antelope, or mating and nesting areas of
the sage grouse
4. Allow winter drilling and 4399 wells on 600 pads, confine drilling to parts of the core area,
prohibit drilling or disturbances of winter range of mule deer or pronghorn antelope or
mating and nesting areas of sage grouse plus: prohibit drilling on thousands of acres (the
flank area) surrounding the core area where drilling was allowed, require the companies to
establish a fund (with initial contribution of $ 4.2 Million and annual payment of $7.500 per
well) to monitor wildlife and to pay for the cost of mitigating any impacts on wildlife that
monitoring detected
5. Allow drilling only within the core area and prohibit drilling in the area around the
periphery, but: permit fewer than 4399 wells and less than 600 pads and limit the total
acreage devoted to wells

Is Alternative 4 the best choice that BLM made? Is there any other better alternatives?
• Alternative 4 is the best choice if we want to have a minimum impact to wildlifes but also
still take account about the access to natural gas for the nation’s sake. Drilling Pollution
Management Fulfilling National Energy Supplies and Environment Optimum Conservation on
wildlife and physical environment.

Although the environmental interest group is fighting over for the sake of the
environment, they do not fully ethically behave. By asking the company to stop drilling in
the winter, it would cause the cost leap for the company as well as the lay-offs of workers
that need to be considered. They cannot simply weighing for one side without thinking over
the result of action in the other side.
 From the ethical point of view, #4 option is the best, because we cannot stop developing the
economy, and we have to find the best way to balance the benefits and moralities. And #4
option include both of them.

6. Should the loss of species produced by the drilling operations of Questar be considered a
problem of pollution or a problem of conservation? Can the loss of species be evaluated
as an “external cost”? Explain.
In my opinion, the loss of species produced by drilling operations by Questar is considered both as a
problem of pollution and a problem of conservation. Because the drilling operations is the main
source of pollution in terms of land pollution which is occupying and damaging wildlife habitat. But
at the same time, the other problem is about the usage of the land which naturally is the habitat for
wildlife species such as sage grouse, mule deer, pronghorn antelope, and so on.
The loss of species can be regarded as external cost in this case. So it must be internalized to
company cost

Yes, they are. Because they are endangered species, we have to protect them, and in order to
protect them, we have to decrease for the damage of environment, which is reduce the pollution.
The loss of species.

Is the loss of species a problem of pollution? Or it just a problem of conservation?

 The loss of species in this case is both a problem of pollution and also a problem of
conservation.

 On the problem of pollution, the operation of Gas Drilling Company is becoming source of
pollution in terms of land pollution which is by occupying & damaging wildlife habitat,
operational vehicle or truck traffic, water pollution may cause by drilling sediments, air pollution
from the operation of drilling rig and so on.

 On the problem of conservation, the government (Via BLM) not imposing strict rules about the
usage of the land which is the habitat for Grouse bird, mule deer, pronghorn antelope, and
other wildlife species.

Can the loss of species by evaluated as an ‘external cost’? Explain?

The loss of species can be regarded as external cost in this case study.
So it must be internalized to company cost.

Private (Internal Cost) + External Cost = Social Cost

Is the loss of species a problem of pollution? Or is it just aproblem of conservation?

• The loss of species in this case is both a problem of pollution and also a problem of conservation.

• On one side, the operation of Gas Drilling company is becoming source of pollution in terms of
land pollution (by occupying & damaging wildlife habitat, operational vehicle / truck traffic), water
pollution (caused by drilling sediments), air pollution from the operation of drilling rig, etc.

• On the other side there is a problem of conservation because the government (Via BLM) not
imposing strict rules about the usage of the land which is the habitat for Grouse bird, mule deer,
pronghorn antelope, and other wildlife species.

Can the loss of species be evaluated as an “external costs”?

Loss of species can be regarded as external cost in this case. So it must be internalized to company
cost where Private (internal cost) + External cost = Social Cost