Traceability in Oil and gas Production: why it matters!

Traceability will become critical for oil and gas industry as production shifts to unconventional sources
As various industries have come under increasing pressure from consumers to provide assurance that their processes are environmentally sustainable, businesses have been prompted to develop mechanisms for tracing products and their component parts back to manufacturers and suppliers. The evolution of this capability has been reshaping public opinion on the extent of corporate accountability and the need for transparency.
Recently, on Enterprise Labelling, we discussed how maintaining intra-industry label compliance will be critical for corporate efforts to establish supplier responsibility standards. Today, we examine how changes in modern oil and gas production will make traceability a major factor in labelling trends and overall supply chain management in the industry.
Oil and gas producers have faced growing public criticism in recent years, due to environmental disasters such as the Deepwater Horizon oil spill. However, the main force driving the rising importance of traceability for oil and gas is the increasing production of fuel from “unconventional” sources such as tar sands and shale gas. Extracting and refining fuel from these sources can be far more environmentally damaging than traditional drilling.
Retailers including Walgreens, Timberland and Bed Bath and Beyond have pledged to avoid using fuel derived from oil sands and organizations such as Greenpeace and the World Wildlife Fund have mounted campaigns highlighting the environmental impact of unconventional fuel production.
The changing regulatory environment is another factor prompting oil and gas producers to embrace the value of traceability. Businesses fear being caught unprepared if unconventional production assets suddenly begin to lose market value due to increased regulatory burdens or shifting public opinion.
Companies that take action to become leaders in label traceability before it becomes a major force in the market may stand at a significant competitive advantage if current labeling trends continue in the oil and gas industry.


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