Case Studies

Which is more important - Environmental Concern or Economic Growth?

Posted by WMM1942 on August 13, 2020 at 8:47am

Sudipta Majumdar, Ph.D.
Amity Business School
Amity University Kolkata

Mr. Amit Mathur paid a farmer 10,000 INR to get permission to drill for oil on a farm in Trombay (Maharashtra, India) and promised to remove the black ooze that would damage the crops. Mr. Mathur was lucky as he found large oil reserves in that area. Big oil companies immediately acquired the surrounding land and Trombay became one of the major petroleum producing regions of India. In a span of a few years, it had started distributing 12 billion barrels of oil and 113 billion cubic feet of natural gas mined in Trombay. This helped companies gain high profits. It also helped in the industrial development of the surrounding area as well as the state (Maharashtra).

But it has raised the pollution levels of Trombay extensively. The oil refineries at Trombay dumped tons of waste containing potentially toxic and heavy metals like carbon and organic chemicals into water for many years. The water in the surrounding areas of Trombay was contaminated by the toxic wastes. The towns near Trombay were also affected as the industrial wastes were dumped off in old wells in the adjoining areas. The off-shore drilling sites dumped the wastes into nearby canal water. People of Trombay had to face serious water pollution problems. Out of the 54 water wells, 50 contained heavy metal deposits.

Much of the pollution associated with oil and gas production was because of the salt and the drilled out mud. In Trombay, the petroleum reserves were found in salt domes and to pull the oil or gas from there, one has to drill the salt out of these domes. When a well is drilled, thousands of litres of brine (salt water) come to the surface. This is then pumped into disposal wells that have been drilled into porous rocks. Drilling mud, another major source of pollution was used to lubricate the drilling bits and flush the drill cuttings to the surface. The mud is a mixture of viscous clay, weighing agents, and chemicals used in different proportions. Weighing agents and heavy metals such as barium, chromium, arsenic, lead, titanium and zinc were added to solidify the rock and prevent it from collapsing. The chemicals used were carbolic acid, caustic soda, ammonia bisulphate, zinc chromate, formaldehyde, asbestos, asphalt and phenols. One third of the drilling mud was forced into rock formations, while the rest of the mud was recycled. The underground water supplies were polluted by the salt, heavy metals and chemicals disposed of by the petroleum industry.

In Trombay, environmentalists found unacceptable levels of salt, heavy metals and chemicals in drinking water. It was two to three times more than what was found in the drinking water of rural farms and small towns throughout the southern part of Mumbai. As a result, many people living in Trombay suffered serious health problems. Many died of cardio pulmonary arrest and with liver cancer. In a nationwide survey conducted on death caused by cancer, the centre for oil and gas production in the state ranked in the top 5%.

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As you read and analyze this case study, your reflective comments are requested on all of the following:

  • Who are the stakeholders, and how are they impacted both positively and negatively?
  • What knowledge and skills are needed to implement sophisticated, appropriate, and workable solutions to the complex global problems facing the world today?
  • What interdisciplinary perspectives would help identify innovative and non-obvious solutions?
  • What insights can you articulate, based on your culture and other cultures with which you are familiar, to help understand your worldview and enable greater civic engagement?
  • What is your position on the right thing(s) to do?

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Comments

  • Jerry must be mandering November 15, 2022 at 11:36pm
    Environmental health and economic growth coincide with eachother immensely. The decision between which of these two concerns should be held in higher regard is clearly environmental health. The point of progress, especially when looking at it from an ethical perspective, is to minimize negative outcomes while producing a positive stimulus in whatever field is being pursued. Transparency in industry must be present. The environment is ours to use abundantly and treat with the same respect it treats all who prosper from it. The stakeholders in the mentioned situation are Mr. Mathur, the farmers and general community of Trombay, and the big oil companies. These groups are all stakeholders due to their investments of time, land, and money into the possibility of increasing the state economy, acquiring oil, and increasing the health of the crops. The positives of the excavation of oil are the increased economy in the region due to more companies coming to drill oil, the oil companies profiting from the oil they are able to sell, and the farmers acquiring money for their lands mineral rights. The negatives are the lying done to the farmers by the companies when talking about preventing environmental declining and the direct negative environmental impacts made from the tactics of drilling and the disposal of waste into the regions water. Knowledge of how the environment remains at it’s healthiest is required to prevent introducing foreign substances that may impact the region negatively. Engineers must be able to know how to properly design tools for drilling that provide efficient ways of removal without doing excess and unneeded damage to the ground which they are removing the oil from. Being from texas, there is a lot of oil excavation. Many people complain about fracking and the negative impact it has on the environment. Fracking causes weakness in the soil and negative impacts on plant growth due to the harsh chemicals introduced into the ground. This directly correlates to the situation in India due to toxic chemicals introduced to the environment. I believe it is necessary to find oil, yet there has to be an environmental focus to minimize the damage done to the earth. Companies should provide transparency and pursue preserving a healthy environment so that future generations are left with a healthy environment that continues to allow progress and production.
  • Dec.Sag November 15, 2022 at 5:07pm
    Going over this Case study, it is obvious how common of a situation this is in a foreign environment. Usually in such Countries, there are negligible information available to the workers regarding Safety, and more often than not the Money and Profit dictates every other circumstance for both the Company and the Workers, due to the huge gap in wealth among citizens. These passive tendencies and lack of knowledge lead to the development of continuous bad practices, that become hard to contain.
    In our case, the main Stakeholders are the people living in Trombay and neighboring villages (farmers, workers, residents), the Big Oil Companies, and Mr. Mathur. Mr. Mathur got impacted positively as he struck gold, finding huge amounts of Oil unexpectedly. The Big Companies also got impacted positively for the most part, until they started noticing health concerns among people throughout the area. But in case of the people of Trombay although the farmers possibly had a positive experience at first when they were getting paid for their farmland but overall, the people took the worst bargain, as it was the lives of their families that getting impacted directly.
    In cases like these, where there are frequent handling of huge amounts of Chemicals, Ooze, Brine, and lubricating Mud, it is extremely important to have appropriate personnel who have the required knowledge to Navigate through any situation and find solutions. If the companies took the initiative to hire someone of with the appropriate knowledge, it would have been the needed solution.
    Based on what we learned, it can be assumed that the Companies only looked at the profits and never bothered about the negative consequences, or they just didn’t care about affecting the lives of the People, just because they were poor. For me the “right thing to do” would be to hire someone who is well equipped in the respective field. I would have accounted for a separate budget dedicated solely to prevention of situations like these.
    • Ehical_Engineer > Dec.Sag November 15, 2022 at 11:27pm
      I really like the perspective you took while analyzing this case study.
  • kendfish November 15, 2022 at 3:40pm
    This case study is a representation of so many cases around the world where the need to innovate outweighs the environmental consequences. The stakeholders in this case are the big oil companies, the governments procuring the oil, the citizens of Trombay, and the farmers that are being paid for their land. The obvious notion is that the oil companies are at a positive stake since they are at the main financial payout. The governments that are buying the oil from these companies also have a stake in the study because if something were to change, they would be impacted. The citizens of Trombay are being negatively impacted due to the increase of pollution in the air and water resources they use daily. However, the stake of the farmers is at an interesting point of view because there is a positive side where they were financially compensated for the drilling, but they are also being impacted health wise. The environmental issues that are being created are happening worldwide and the “right” thing to do is not always clear. The biggest conflict in this is having to transfer the main energy source, oil, over to a cleaner form. However, this change has been talked about for years with no substantial results since this changeover would be extremely expensive to consumers and companies. My ideas on what should be done is the slow change into using more sustainable resources like solar power or finding a way to obtain oil in a more environmentally conscious way. These solutions are not easy, but the right thing to do will be to find any solution that will create a better environmental impact.
    • Jerry must be mandering > kendfish November 15, 2022 at 11:39pm
      I agree that we should find more environment friendly ways to produce power. Companies should have transparency and the communities should have proper discernment when dealing with large corporations. This is a great analysis!
  • womaneng November 15, 2022 at 11:15am
    This case study is not unique, it is a common occurrence around the world that constantly has our society questioning whether community risk is worth financial benefit. The big oil companies, farmers, and residents of Trombay are all stakeholders in this case and are affected either positively or negatively as a result of the oil refineries. Once the oil companies acquired the surrounding land, they had distributed billions of products including oil and natural gas. This allowed for those big oil companies to gain high profits. Now on the other hand, the farmers and residents of Trombay were severely impacted, the drinking water was heavily polluted with chemicals and high salt levels making it no longer suitable to consume without the risk of health issues arising.

    When working with drilling rigs that use mud as a lubricant and have liters of salt water pumped into disposal wells as a result, knowledge and skills about the effects the chemicals produced are needed in order to implement sophisticated, appropriate, and workable solutions in this specific case. Not every case will have these circumstances but it is expected that every project has the appropriate personal that are well knowledge in how to create solutions or alternatives to outcomes that could negatively impact the society. If the big oil companies had taken the necessary measures of hiring someone with knowledge and previous interdisciplinary perspectives on the salt, ooze, and specific chemicals emitted during the drilling process, it would have helped identify innovative and non-obvious solutions to the environmental pollution.

    Based on the knowledge provided, it can be assumed that the big oil companies either did not consider the negative effects on the community or frankly, did not care enough based on the region and likelihood of the surrounding towns being extremely low income. In order to make sure “the right thing” is done, the companies need to have a team equipped with someone well versed in the environment and the negative effects their drilling could ensue to make the correct safety protocols to prevent water contamination. There should have been a portion of the budget allocated solely for the prevention of water contamination to assure clean water for the community which would still allow for the profit of the companies and most importantly the safety of the citizens in the surrounding towns.
    • Dec.Sag > womaneng November 15, 2022 at 5:06pm
      I really liked how you explored other perspectives. It is very nicely written.
  • Ehical_Engineer November 15, 2022 at 3:19am
    This case study is composed of two main stakeholders. First, there are the big oil companies. These big oil companies were affected positively in terms of economics. Secondly, there are the people of Trombay. The people of Trombay are affected both positively and negatively. It affected them positively because of the boost in industrial development. They are affected negatively because their land is being destroyed along with their water. After years of waste dumping into Trombay’s water, their drinking water became contaminated. As result, many of Trombay’s people died due to cardiopulmonary arrest and liver cancer.

    Damaging the environment and economic growth are not mutually exclusive. We can recognize that there must be a way to successfully grow economies without damaging the environment. The solution to this dilemma is simple. Big oil companies can do all the drilling they want. However, if there is any hazardous waste or contamination of water or crops, then the big oil company is sued for all the company is worth and the money is used to clean up their mess. The remaining dollars from the lawsuit can go somewhere noble. With a punishment so harsh, the big oil companies would have too much fear to allow this to happen again.
  • fffjohn November 12, 2022 at 4:21pm
    Stakeholders are major oil discoverers, such as oil companies, Trombay residents, and farmers near construction sites or landfills. As a developing country, oil and energy are necessary to create jobs, produce goods, and drive general economic growth. It is the engine of the economy and gives countries the opportunity to outsource materials to bring in income and capital for developing countries to grow. Other benefits include cheaper energy, more jobs, and more economic opportunities for city-states and countries. Some of the negative factors that increase pollution are contaminated drinking water and pollution, and the health concerns of pollution for both humans and surrounding wildlife, including serious problems and even death.
    By knowing the waste that can be produced and released into the environment, we can predict the environmental impact of drilling for oil and find more sustainable solutions. Environmentalists could have come together to develop filters or methods to eliminate waste in a sustainable and healthy way that does not harm the environment or people. commercial success and ecological stability would have been possible.
    By having an interdisciplinary perspective on what I do, my country is making money, and keeping it healthy is the way forward rather than sacrificing one for the other.
    I am from Nigeria and it is very corrupt being an oil giant they will focus on as much money as possible not really caring about civic engagement as long as it means more money to their pockets. I personally believe they should care about their country and use all the money they get to build their country up rather than always tearing it down. We are a giant in many raw materials and we can use that to build the country but we choose to outsource and sell everything because the higher-ups know it will benefit them the most in regards to how much money they can get in their pockets. We can honestly do better by making everything in-house and building the country up.
    I personally believe we should do the right things no matter what because we are here in this world to be able to expand consciousness and to build the world for a better tomorrow so our kids and people after us can live well and continue to build and destroy and doing bad things for small satisfaction at the cost of damage a lot of things is not worth it.
  • ethicalgirl November 6, 2022 at 10:43am
    Throughout the case study above, the author uses literary techniques to highlight two fundamental concepts: economic growth and environmental concern. Majumdar considers that the environment must be negatively affected if there is to be any economic growth. He also suggests that the opportunism of oil companies to obtain these natural resources outweighed any health risks presented to surrounding communities. Due to the location’s plethora of petroleum, large companies found themselves involved in the erection, and environmental concerns became overshadowed by money and success.

    Stakeholders in this major petroleum discovery included oil companies, Trombay residents, and farmers surrounding the erection or waste disposal areas. Companies were positively impacted by this event due to the amount of economic success accompanying the natural resources industry. The health of the surrounding communities was negatively impacted by the erection of these resources and the disposal of their waste, contaminating both water sources and farmland. By implementing a team of environmental experts, a number of sophisticated, appropriate, and workable solutions could have been applied to reduce the carbon footprint of the project.

    Knowledge pertaining to salt domes, black ooze, and carbon and organic chemicals present in the area could have been used to determine the environmental consequences of drilling for petroleum. Environmentalists could have insisted on a number of safety precautions, such as groundwater filters or barriers to keep the toxins from infiltrating the community water supply. This would have allowed for economic success and environmental stability.

    Based on travel experience and the locations of Mumbai and Trombay, it can be deduced that the influenced communities are considered third-world. Using greater civic engagement, it can be concluded that the large companies involved in this project did not consider the environmental concerns of the area because the voices of the people weren't loud enough. There are a variety of ways these damages could have been prevented, however, there are only ways to make up for it now. The ethical thing to do next is to develop a plan for a clean-up crew and compensate the affected parties for their medical expenses.
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