Does your firm face serious (costly and reputation-harming) oil pollution risk, and can that risk be quantified in financial terms?: it's not just about tankers
crashing or oil platforms exploding. Many firms store enough oil on their sites to be at significant financial risk.
Companies that store oil for heating, process use, or vehicle fuel are
subject to strict regulations to prevent pollution incidents from poor
storage. According to the EnvironmentAgency, on average an oil spill (which might occur due to aging equipment or poor choice of equipment or errors in filling or draining the tank) costs a business £30K in fines, clean up costs
and lost operational time. This figure doesn't appear to include the
cost of buying more oil to make up for the amount spilled.
The relevant regulations that firms need to comply with in England are
the Oil Storage Regulations and the Control of Major Accident Hazards containment policy; there are equivalent regulations for Scotland and
Northern Ireland.
200 Litre oil drum. If you have a volume of oil storage equivalent to more than one of these in England you must follow the oil storage regs |
The Environment Agency provides quite a lot of advice for free on their website.
Spills happen all the time; they are not a rare problem. Oil is the most common type of waste pollution in the
UK. The Environement Agency says it records over 5K incidents annually. Few people know that oil pollution is a criminal rather than a civil offense in the UK. Recent research in Europe by The European Space Agency has
found that just over a third of oil reaching the oceans came from land-based
spills rather than ships or oil platforms, so it makes sense that spills on land are treated so seriously.
Recently the UK's largest producer of malt was fined £20,000
and made to pay £6475 in costs and were ordered to make improvements costing
£11K to prevent a recurrence after oil leaked from a faulty storage bund into a nearby river, killing 47 fish. That's a cost to the business of about £800
per fish they killed. That's one way to
put a value on environmental assets. Of
course it doesn't make sense in terms of the cost of a fish, but the long term
damage to ecosystems in the river will mean many more fish (and other animals
and plants) will be affected. Moreover there may be farm animals downstream drinking this water, and companies drawing it off for process use, and eventually maybe a water company that will recycle and purify it into mains water.
One seriously expensive fish! |
Eventually, the firm is reported to have spent £106,304 on clean-up andmaintenance. The event polluted 4 km of river.
These penalties are perhaps not so surprising at a time when water resources are increasingly under
pressure, resulting in hosepipe bans and increased metering, as well as the
threat of rising prices: over the years
2002-07 UK water charges rose 32% (http://www.earth-policy.org/plan_b_updates/2007/update64),
considerably faster than inflation.
What can you do about this risk?
Manyspecialist oil storage firms can offer help in bringing your oil storage up to required standards
Julia Lawrence Sustainable Business Management can help you evaluate the risk to your firm and compare the risks, costs and benefits of oil alternatives that would suit your organisation's needs.