Questar Corporation's Drilling Operations on Pinedale Mesa

The objective of this case study is to investigate the various systemic, corporate and ethical issues behind Questar Corporation’s drilling operations on the Pinedale Mesa. Besides that, this case study is conducted to determine the value of wildlife species and its balance against the economic interests of Questar Corporation.

Furthermore, it is also to determine whether Questar is morally obligated to cease its operations on the mesa and whether the environmentalists have behaved ethically in this issue.

Case Summary

The Pinedale Mesa extends north and south of eastern side of Wyoming’s Green River Basin, an area that is famous as the gateway to hunting, fishing and hiking.

It is surrounded by hundreds of recently drilled wells owned by Questar Corporation, an energy company.

The company’s expanding operations are intruding in the wildlife habitat on top of the mesa. However, the natural gas drilled by Questar Corporation is a desperately needed resource that provides the nation with clean and cheap source of energy as natural gas burns more cleanly than coal, diesel, oil or gasoline.

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It also reduces US’s reliance on foreign supplies and the drilling brings job opportunities, increased tax revenues and creates a booming economy for Wyoming.

To protect large areas of the mesa which are habitats for muledeer, pronghorn sheep, sage grouse, and other species, the Bureau of Land Management (BLM) has imposed several restrictions and drilling rules to protect them specifically the sage grouse. The sage grouse is a colourful bird that is dependent on rare old-growth sagebrush for food and is extremely sensitive to human activity.

Its numbers are increasingly dwindling.

The mesa is also a migration area used by muledeer, moose and pronghorn antelope. Environmentalists fear that the drilling interferes with the migration route or turn the winter ranges inhospitable for the species. Therefore, all drilling activities on the mesa is stopped during the winter. This is costly for Questar because drilling crews had to be laid off during the winter and rehired and retrained every spring.

Nevertheless, conservationists believe that the restriction is not enough and demands more. In May 2004, U.S. Fish and Wildlife Service announced that the process of studying whether the sages grouse should be classified under the protection of the Endangered Species Act.

Questar and other companies formed a coalition to lobby the Bush administration to keep the grouses off the endangered species list.

In 2004, Questar sent a proposal to BLM to invest in directional drilling that would minimise the land occupied by wells, required roadways and distribution pipes. The innovation would reduce any harmful effect on the wildlife. However, the drilling method is costly but can be justified by continuous drilling all through winter. BLM accepted the proposal to allow the company to test the feasibility of directional drilling and its impact on the wildlife during winter but was sued for failing to adhere to its own rules for failing to conduct analysis of the potential impacts of granting the permits beforehand.

Case Study Questions

1) What are the systemic, corporate and individual issue raised in this case?

The systemic issues in this case are whether the government must take action on the ecological point of view. Even though the Questar drilling has benefits the local economies and increasing the welfare, they must also concern about the saga grouse that almost extinct and other wildlife population in the area. With the high need of clean energy, the natural gas drilling has also become very important nowadays.

The corporate issues within Questar are how the company should be able to meet the demand of the natural gas without have a problems to be sued by some environmental matters.

The first individual issue is Jim Smith a former communications directors for President George W.Bush’s Energy Task Force. He establishes a website to lobby the Bush administration to keep the grouse off the endangered species list. He also wants to unleash the grass-roots opposition to provide some political cover and suggest funding scientific studies to show that the saga grouse was not endangered. .

The second individual issue is Dru Bower, the vice president of the Petroleum Association of Wyoming He said that ‘listing (endangered species) are not good for the oil and gas industry. So, anything that we can do to prevent a species from being listed is good for the industry’.

The third individual issue is George W. Bush the former president of USA. He said that the new sources of domestic energy are key to the country economic future. He came to power seeking to unsnarl bureaucratic red tape, speed the government 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 but Clinton had closed to road building, logging and drilling.

2) How should wildlife species like grouse or deer be valued and should that value be balanced against the economic interest of a company like Questar? It is difficult to put a wildlife species into monetary valuation. Some of the available research 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. However, the wild life value is not about monetary aspect. It is also include of environmental balance need to be concerned as well. When dealing with an economic interest company like Questar, there should be an effort by the company to receiving the environment as well to provide some conservation fund to help the work of conservation.

3) In light of the U.S economy’s dependence on oil and in light of the environmental impact of Questa’s drilling operations, is Questar morally obligated to cease its drilling operations on the Pinedale Mesa? Explain.

Actually, Questar was morally obliged, but the Questar Company should continue their innovation for drilling so that the environment and animal around Questar can survive and have a chance to breathe.

4) What, if anything should Questar be doing differently?

The Questar should consider the solution of the impact for environment and animals from around it from the beginning.

5) In your view, have the environmental interest groups in the case behaved ethically?

In my point of views, the environmental group was not fully ethic even though they fighting for the sake of the environment. It is because they asking the company to stop drilling in the winter. It can cause the cost leap and the lay-offs of workers that also need to be considered. They cannot just focused and think for one side benefits only without thinking over the result of their action on the other side.