Stakeholder Analysis of the Obama Administration’s Proposed Oil Drilling Regulations

Each year, more than sixty billion cubic feet of methane gas are accidentally released from United States oil and gas operations (Bureau of Land Management 2016). This leakage not only wastes a finite quantity of energy resources, but also places United States citizens at a direct risk of declining environmental quality. On January 22, 2016, the Obama administration released plans that would force energy companies to reduce methane leaks on all government-owned properties (Warrick 2016). If these proposals are put into legislation, stakeholders such as environmental groups and energy companies would be affected. These groups’ views and opportunities can be assessed through the use of a Power, Attitude, Proximity, and Interest (PARI) analysis, which uses a ten-point scale over the four different categories to assess stakeholders (Bryson 2004, 23). Conducting a PARI analysis will not only reveal that both environmental groups and energy companies have a large stake in Obama’s proposed plans, but also that they have the ability to collaborate and bring about meaningful change.

The first component of a PARI analysis involves assessing the relative power of each stakeholder. Environmental groups hold a considerable amount of power in this context, as they not only have the support of the Obama administration, but also a sizeable portion of the American public. A 2014 poll found that about half of Americans view issues involving climate change and the environment as major concerns (Pew Research Center for the People and the Press 2014, 2). Environmental groups have the ability to mobilize these individuals and implement oil leakage regulations. As successful as some grassroots campaigns have been in the past, however, oil companies have both strong support in the majority Republican Congress and the necessary financial resources to exert their influences. For this component, the environmental groups score a six, while the energy companies score an eight.

The second component of a PARI analysis is attitude. Upon first evaluation, it is easy to place environmental groups and oil companies on extreme opposite ends of the spectrum, but this straightforward viewpoint ignores the complexities of individuals’ values and perspectives. Ideals towards the environment differ not only between different environmental groups, but within environmental organizations themselves as well (for example, some members of environmental groups may be market liberals, who place a large emphasis on economic growth) (Clapp and Dauvergne 2005, 4). Oppositely, some oil executives may already be conducting practices designed to protect the environment, and thus might agree with stricter regulations. As a whole, however, environmental groups are more likely to view the Obama administration’s proposed plans favorably (score of eight) than oil companies (score of three).

Energy companies and environmental groups also score differently in terms of proximity. Although both groups are proximate to the issue in the sense that all Americans are affected by oil leakage, the energy companies’ employees are much closer to the subject, as they are the people actually working at the oil sites (Bureau of Land Management 2016). While it is true that energy executives (the people making the decisions on how to extract oil) work in offices far away from oil sites, they earn their livelihood off the sites and have an obvious stake in any potential legislation. Oil companies score a nine on the proximity portion of the PARI analysis, while environmental groups score a four.

The final component of the PARI analysis is interest. Both groups are strongly interested in the outcome of the Obama’s plans. These proposals would directly affect the oil companies’ profits, making the companies highly invested in the issue (score of ten). Most environmental groups are also interested in the result, but the level of interest likely varies from individual to individual. Many environmentalists are interested in many causes, and they may not strongly care about this particular situation (Clapp and Dauvergne 2005, 5). They still score highly on the PARI analysis (eight), however.

The use of a PARI analysis reveals that oil companies are more interested, proximate, and powerful in the issue surrounding oil regulations. Environmentalists are also invested in the issue, however, and have the support of both President Obama and some of the American public. The key insight of the PARI analysis is that while the stakeholders disagree on some of the specific details, there is enough overlap in values and ideals between the two groups to suggest that compromise in legislation is possible. These stakeholders can offer different resources, and they must collaborate to produce an outcome that satisfies both the needs of the American public and the future welfare of the environment.

Bibliography

Bryson, John M. 2004. “Stakeholder Identification and Analysis Techniques.” Public Management Review 6 (February): 21-53.

Clapp, Jennifer and Peter Dauvergne. 2005. “Peril or Prosperity? Mapping Worldviews of Global Environmental Change.” In Paths to a Green World. Cambridge, MA: MIT Press, 1-17.

Pew Research Center for the People and the Press. 2014. “As New Dangers Loom, More Think the U.S. Does ‘Too Little’ to Solve World Problems.” August 28.

U.S. Department of the Interior. Bureau of Land Management. 2016. Fact Sheet on Methane and Waste Reduction Rule. Washington, D.C.: U.S. Department of the Interior.

Warrick, Joby. 2016. “Obama Administration Expands Climate Fight With Proposed Rules for Oil and Gas Drilling.” The Washington Post Online, January 22.