CHAROTAR UNIVERSITY OF SCIENCE AND TECHNOLOGY (CHARUSAT)

FACULTY OF MANAGEMENT STUDIES (FMS)

INDUKAKA IPCOWALA INSTITUTE OF MANAGEMENT
BBA PROGRAMME (2018 – 21)
SEMESTER – 4

A PRESENTATION ON
(BM212.1) CONTEMPORARY ISSUES IN MANAGEMENT
UNSTABILTY ON ENVIRONMENT DUE TO CRUDE OIL
EXTRACTION
STUDENT ID. NO. : 18BBA089 Submitted to :
S T U D E N T N A M E : S H I VA N G I R AT H O D Dr. Pranav Desai
Asst. Professor, I2IM - CHARUSAT
 Index
SR. No. Title Pg. No.

1. Introduction.
2. Impact of crude oil extraction on economy.
3. Impact of crude oil extraction on environment.
4. Regulatory measures and their impact on crude oil extraction.
5. Campaign and movements for crude oil extraction.
6. Glimpses of various reports on unstabilty of environment due
to crude oil extraction .
7. Remedial measures /corrective actions for crude oil extraction.

8. Government schemes, subsidies and support for controlling

crude oil extraction.

9. Impact of government schemes, subsidies and support for

crude oil extraction.
10. Conclusion.
 Introduction

What Is Crude Oil?

o Crude oil is a naturally occurring, unrefined petroleum product composed of
hydrocarbon deposits and other organic materials. A type of fossil fuel, crude oil
can be refined to produce usable products such as gasoline, diesel and various
forms of petrochemicals.
o It is a non renewable resource, which means that it can't be replaced naturally at
the rate we consume it and is, therefore, a limited resource.
o Crude oil is typically obtained through drilling, where it is usually found
alongside other resources, such as natural gas (which is lighter and therefore sits
above the crude oil) and saline water (which is denser and sinks below).
oIt is then refined and processed into a variety of forms, such as gasoline,
kerosene, and asphalt, and sold to consumers.
o Although it is often called "black gold," crude oil has ranging viscosity and
can vary in color from black to yellow depending on its hydrocarbon
composition. Distillation, the process by which oil is heated and separated in
different components, is the first stage in refining.

o Crude Oil usually contains about 84% carbon; 14% hydrogen; 1% to 3%

Crude Oil usually contains about 84% carbon; 14% hydrogen; 1% to 3%
sulphur; and nitrogen, oxygen, heavy metals, and salts that total less than
1%.

Crude Oil consumption constitutes around 29% of India’s energy mix.

Coal still remains the most consumed fuel mineral in India, followed by
crude oil.

ONGC (nomination) has the largest share of 72% crude oil reserves with OIL
India (nomination) and product sharing contract (PSC) fields having 13% and
15% respectively.
Oil Refining Process
History of Crude Oil Usage

Although fossil fuels like coal have been harvested in one way or
another for centuries, crude oil was first discovered and developed during the
Industrial Revolution, and its industrial uses were first developed in the 19th
century.
Newly invented machines revolutionized the way we do work, and they
depended on these resources to run. Today, the world's economy is largely
dependent on fossil fuels such as crude oil, and the demand for these resources
often spark political unrest, as a small number of countries control the largest
reservoirs.
Like any industry, supply and demand heavily affect the prices and
profitability of crude oil. The United States, Saudi Arabia, and Russia are the
leading producers of oil in the world.
 Impact of Crude oil extraction on
economy.

Higher oil prices increase prices of other fuels, such as gasoline, home
heating oil, and natural gas. It's responsible for 55% of the price of gasoline.
Distribution and taxes influence the remaining 45%. That drives up the cost of
electric power generation and manufacturing.
According to the EIA, oil prices affect 96% of transportation. That creates
higher food prices. It also impacts 43% of industrial products, 21% of residential
and commercial use, and 3% of electric power. As a result, higher oil prices
increase the cost of everything you buy, creating inflation.
Burning oil or gasoline releases the carbon dioxide that's been stored. The
gases remain in the earth's atmosphere. They act like a blanket over the earth,
capturing the heat from the sun after it's bounced off the earth's surface. It's
created a greenhouse effect.
We've burned so much oil in such a short time that the gases have increased by
43% since 1880.
This global warming has created extreme weather patterns. It increased heat
waves, droughts, and destructive wildfires.

Winter has become shorter, but unstable weather patterns have allowed Arctic
blizzards to pummel the Northeast. Hurricanes in the past 16 years cost the
economy $700 billion.
According to the U.S. Government Accountability Office, it will cost $112
billion per year in the future. All solutions to global warming require us to
wean off of oil as the predominant fuel.
Prime Minister Narendra Modi may have set a target to cut India's oil import
dependence by 10 per cent but the country's reliance NSE -1.95 % on foreign
oil for meeting its energy needs has jumped to a multi-year high of nearly 84
per cent, latest government data showed.
• Speaking at the 'Urja Sangam' conference in March 2015, the Prime
Minister had said that India needs to bring down its oil import dependence
from 77 per cent in 2013-14 to 67 per cent by 2022 when India will celebrate
its 75th year
• Further, the dependence can be cut to half by 2030, he had said. But with
consumption growing at a brisk pace and domestic output remaining stagnant,
India's oil import dependence has risen from 82.9 per cent in 2017-18 to 83.7
per cent in 2018-19, according to the oil ministry's Petroleum Planning and
Analysis Cell (PPAC).
• In contrast, domestic output continues to fall. India's crude oil output fell
from 36.9 million tonnes in 2015-16 to 36 million tonnes in 2016-17. The
trend of negative growth continues in the following years as well as output fell
to 35.7 million tonnes in 2017-18 and to 34.2 million tonnes in the fiscal year
that ended on March 31, 2019, PPAC data showed.
• The country's oil consumption grew from 184.7 million tonnes in 2015-16 to
194.6 million tonnes in the following year and 206.2 million tonnes in the year
thereafter. In 2018-19, demand grew by 2.6 per cent to 211.6 million tonnes.

• The government is focusing on measures like increasing domestic production,

promoting the use of biofuel and energy conservation to reduce dependence on
imported crude oil.

• It changed exploration rules multiple times during the last five years to get the
elusive private and foreign investment
Impact of Crude Oil on environment.

The secret to fossil fuels’ ability to

produce energy is that they contain a
large amount of carbon. This carbon is
left over from living matter — primarily
plants — that lived millions of years ago.
Oil and natural gas are usually the result
of lots of biological matter that settles to
the seafloor, where the hydrocarbons
(molecules of hydrogen and carbon),
including methane gas, become trapped
in rocks.
 Many drains lead directly to rivers, streams or lakes, and if you allow oil to
enter a drain it can have the same effect as you pouring it directly into a
watercourse.

Just 1 litre of oil can contaminate 1 million litres of water . Oil

pollution can have a devastating effect on the water environment, it spreads over
the surface in a thin layer that stops oxygen getting to the plants and animals that
live in the water. Oil pollution:
harms animals and insects
prevents photosynthesis in plants
disrupts the food chain
takes a long time to recover
Wildfowl are particularly vulnerable, both through damage to the
waterproofing of their plumage and through eating the oil as they preen.
Mammals such as water voles may also be affected too.
In the ground and soil oils coat or kill the organisms which are necessary to
maintain the environmental balance.
Petroleum sources are usually small pockets of liquid or gas trapped within rock
layers deep underground (often under the seafloor).

Extracted crude oil is refined and used to manufacture gasoline (used in

transportation) and petrochemicals (used in the production of plastics,
pharmaceuticals, and cleaning products).
Oil companies pump liquid oil out of the ground by using drilling rigs and wells
that access the pockets of oil resources. The oil fills the rock layers the way water
fills a sponge — spreading throughout open spaces — instead of existing as a giant
pool of liquid.

This arrangement means that to pump out all the oil, drillers have to extend or
relocate the wells after the immediate area has been emptied. Oil drilling rigs set on
platforms in the ocean to access oil reserves below the seafloor must therefore
employ a series of more technically complex drill rigs built to access oil reserves in
deeper water.
 This arrangement means that to pump out all the oil, drillers have to extend or
relocate the wells after the immediate area has been emptied.

Oil drilling rigs set on platforms in the ocean to access oil reserves below the
seafloor must therefore employ a series of more technically complex drill rigs
built to access oil reserves in deeper water.

Refining petroleum creates air pollution. Transforming crude oil into

petrochemicals releases toxins into the atmosphere that are dangerous for human
and ecosystem health.

Burning gasoline releases CO2. Although oil doesn’t produce the same
amount of CO2 that coal burning does, it still contributes greenhouse gases to the
atmosphere and increases global warming.
This figure illustrates some of the most commonly used ocean drilling rigs and
platforms and the water depths they’re most suited for.
 Although large oil spills with catastrophic environmental effects — such as the
1989 Exxon Valdez in Alaska or the 2010 BP Deepwater Horizon in the Gulf of
Mexico — get the most media coverage, most of the oil spilled into ecosystems
is actually from oil that leaks from cars, airplanes, and boats, as well as illegal
dumping.
The environmental impact of fracking for natural
gas

Natural gas is a relatively clean-burning fuel source — it produces

approximately half the CO2 emissions that coal burning produces — so demand for
natural gas has increased in the last few decades as concerns grow about carbon
emissions and global warming.
Now fuel producers are exploring natural gas in reservoirs separate from
petroleum as sources of this fuel. To release the gas from the rocks and capture it for
use as fuel, companies use a method of hydraulic fracturing, or fracking.
The sand and chemicals are left behind in the rock fractures, leading to
groundwater pollution and potentially less stable bedrock. Currently scientists are
concerned that earthquakes in regions of the Midwestern United States that have
never experienced earthquakes before are the result of wastewater from natural gas
fracking operations.
Regulatory measures and their impact
on crude oil extraction.

The oil and gas drilling sectors are

recognized as being a vital part of
the U.S. economy, both in the long-
and the short-term.
In recent decades, however, they
have been subject to scrutiny on
the basis of such environmental
issues as air and water quality,
offshore regulation and chemicals
management. This has occurred in
conjunction with other measures
used to encourage alternative-
energy production and establishing
shale gas infrastructure.
 There is no national oil and gas company in the United States.
Instead, there are numerous private businesses operating in the sector, including
large international corporations. The activities of these companies are regulated
on the state and federal level.
To begin exploration for oil and gas drilling, the business must obtain a
development permit, a drilling permit and an operating permit.
Environmental regulation can be seen as having a positive impact on the
gas drilling sector in particular. Existing measures aimed at reducing greenhouse
gas emissions mainly have a negative impact on established coal power plants.
The economic impacts of this have led to an artificial acceleration in the natural
gas sector.
The overall aim of the act is a reduction in the emissions of greenhouse
gases, with a long-term goal of 95% reduction in volatile organic compounds.
The act stipulates that operators must take measures to capture natural
gas that escapes into the air (green completion), and there are incentives for
businesses to implement this technology ahead of the deadlines.
The technology allows for the natural gases to be caught and treated and then
sold instead of being released as waste. The estimated revenues are expected
to exceed the costs of compliance.
The U.S. Environmental Protection Agency (EPA) suggests that while
meeting the Clean Air Act regulations will cost $65 billion from 1990 to 2020,
the savings realized from fewer premature deaths, lower health costs and
increased productivity will add up to $2 trillion.
While the implementation of this technology ought to be simple for large,
multinational corporations, smaller companies may not be able to budget for
the initial start-up costs. About 80% of the domestic oil and gas companies in
the U.S. are very small, often with fewer than 10 employees.
These initiatives may have a severe impact on the economic viability of these
smaller operations.
Campaigns and movements for Crude oil
extraction.
 Glimpses of various reports on Crude oil
Extraction

UNIT

United States 676

Saudi Arabia 583
Russia 556
Canada 259
Iraq 230
Iran 214
China 193
United Arab Emirates 181
Kuwait 150
Brazil 136
Mexico 102
Nigeria 101
Global crude oil production rose (+2%) driven by explosive
growth in the United States (+16.5%)
• OPEC members in June 2018 agreed to increase oil production to
prevent a supply shortage and reduce prices after previous production
cuts were deemed excessive and raised prices too much. This stabilised
global prices, before rising again on anticipation of US sanctions on
Iranian oil exports.
• Crude oil production in the United States saw a significant
increase as exploration and extraction of oil from its plentiful shale
reserves grew, causing the largest ever annual increase by a single
country. This was due to new projects coming online, a persistent
demand for oil and higher prices (US$14 per barrel higher than 2017). Oil
production also continued to increase in Russia, the Middle East (except
Iran) and in Africa.
• On the other hand, Latin America experienced an overall decline.
Political issues mounting in Venezuela and, paired with sanctions from
the United States, saw oil production drop 29%, equivalent to one third of
the rise in the US.
Remedial measures / corrective actions for
___________.
 Government schemes, subsidies and
support for Crude oil.

Oil importing countries Oil exporting countries Developing countries

Declining oil price may Lower oil prices might May benefit more from a
reduce medium term trigger contractionary decline in energy input
inflation expectations fiscal policy measures costs. Household inflation
below target Central expectations in developing
banks could respond economies may also be
with additional more respective to changes
monetary policy which in fuel prices than in
can support growth developed countries.
Impact of Government schemes, subsidies
and support for _______.
Conclusion.
Thank You.