APPLYING THE ANALYTIC HIERARCHY PROCESS TO OIL SANDS ENVIRONMENTAL COMPLIANCE RISK MANAGEMENT
##plugins.themes.bootstrap3.article.main##
##plugins.themes.bootstrap3.article.sidebar##
Abstract
In 2013, oil companies in Alberta, Canada invested $32 billion in new oil-sands projects. Despite the size of this investment, there is a demonstrable deficiency in the uniformity and understanding of environmental legislation requirements that translate into increased project compliance risks. In this paper, we applied the Analytic Hierarchy Process (AHP) to develop a priority list of environmental regulatory compliance risk criteria for oil-sands projects. AHP belongs to the family of multicriteria decision-making (MCDM) techniques that utilizes a pairwise comparison matrix solicited from subject matter experts (SMEs) in the field as input. The overall methodology itself consisted of 4 phases: (1) identification of the initial list of N potential environmental compliance risk criteria and verification of these criteria via a pilot survey; (2) formation of a pairwise comparison survey in the form of an N(N-1)/2 comparison matrix based on the verified criteria; (3) administration of the pairwise comparison matrix to a sample of 16 industry-specific SME’s; and (4) the application of the AHP method using SuperDecisions as a tool on the collected sample to rank the identified risk criteria. Our demonstrated results can potentially inform Alberta oil sands industry leaders about the ranking and utility of specific compliance risks as understood by experts and enable a more focused environmental compliance action to help increase legislative and public trust.
How to Cite
Downloads
##plugins.themes.bootstrap3.article.details##
AHP, Alberta, environment, MCDM, oil sands, project risk criteria, regulatory compliance
Alberta Environment. (2008). Specified gas-reporting regulation: Alberta environment report on 2007 greenhouse gas emission. Retrieved from
http://www.environment.alberta.ca
Andersen, S., & Mostue, B. A. (2012). Risk analysis and risk management approaches applied to the petroleum industry and their applicability to IO concepts. Safety Science, 50, 2010-2019. doi:10.1016/j.ssci.2011.07.016
Arimura, T. H., Hibiki, A., & Katayama, H. (2008). Is a voluntary approach an effective environmental policy instrument? A case for environmental management systems. Journal of Environmental Economics and Management, 55, 281-295.
doi:10.1016/j.jeem.2007.09.002
Aydin, O., & Arslan, G. (2010). Optimal hospital location with fuzzy AHP. The Business Review, Cambridge, 15, 262-268. Retrieved from http://www.jaabc.com/
Beccacece, F., & Borgonovo, E. (2011). Functional ANOVA, ultramodularity and monotonicity: Applications in multiattribute utility theory. European Journal of Operational Research, 210, 326-335. doi:10.1016/j.ejor.2010.08.032
Briggs, C. A., Tolliver, D., & Szmerekovsky, J. (2012). Managing and mitigating the upstream petroleum industry supply chain risks: Leveraging analytic hierarchy process. International Journal of Business & Economics Perspectives, 7, 1-20. Retrieved from http://www.iabpad.com/
CAPP, (2010). Responsible Canadian energy oil sands progress report, for the year ended December 31, 2009. Canadian Association of Petroleum Producers. Retrieved from http://www.capp.ca
Cherry, M. A., & Sneirson, J. F. (2011). Beyond profit: Rethinking corporate social responsibility and green washing after the BP oil disaster. Tulane Law Review, 85, 983-1038. doi:10.2139/ssrn.1670149
Cooper, D. R., & Schindler, P.S. (2013). Business research methods (12th ed.). NewYork, NY: McGraw-Hill Irwin.
Coskuner, G. (2009). A new process combining cyclic steam stimulation and steam-assisted gravity drainage: Hybrid SAGD. Journal of Canadian Petroleum Technology, 48, 8-13. Retrieved from http://www.onepetro.org
Edwards, D., & Darnall, N. (2010). Averting environmental justice claims? The role of environmental management systems. Public Administration Review, 70, 422-433.
doi:10.1111/j.1540-6210.2010.02156.x
El-Fadel, M., Abi-Esber, L., & Ayash, T. (2009). Managing emissions from highly industrialized areas: Regulatory compliance under uncertainty. Journal Atmospheric Environment, 43, 5015-5026. doi:10.1016/j.atmosenv.2009.06.056
Enyinda, C. I., Briggs, C., Obuah, E., & Mbah, C. (2012). Petroleum supply chain risk analysis in a multinational oil firm in Nigeria. Journal of Marketing Development & Competitiveness, 5(7), 37-44. Retrieved from Business Source Complete database. (Accession No. 71666007)
ERCB (2008). ERCB Investigation Report; MEG Energy Corp. steam pipeline failure, license no. P 46441, line no. 001, May 5, 2007. Retrieved from
http://www.ercb.ca/docs/products
ERCB (2011). ERCB report ST98-2011- Alberta’s energy reserves 2011 and supply/demand outlook—Economics. Retrieved from
http://www.ercb.ca/docs/products/STs/
Estévez, R. A., Walshe, T., & Burgman, M. A. (2013). Capturing social impacts for decisionâ€making: A multicriteria decision analysis perspective. Diversity and Distributions, 19, 608-616. doi:10.1111/ddi.12058
Firestone, J. M. (2006). Risk intelligence metrics: An adaptive metrics center industry report. Executive Information Systems, Inc.
Flammer, C. (2012). Corporate social responsibility and shareholder reaction: The environmental awareness of investors. Academy of Management Journal, 55. doi:10.5465/amj.2011.0744 ACAD MANAGE J July 20, 2012 amj.2011.0744
Geng, G., & Wardlaw, R. (2013). Application of multi-criterion decision making analysis to integrated water resources management. Water Resources Management, 27, 3191-3207. doi:10.1007/s11269-013-0343-y
George, R. (2012). Sun rise, Suncor, the oil sands and the future of energy. Toronto, Canada: HarperCollins Publishers Ltd.
Goepel, K. D. (2011). AHP-ANP practical applications with pros and cons. Retrieved from http://www.bpmsg.com/ahp-anp-practical-application-slides/
Government of Alberta, (2009). Energy Strategy. Retrieved from http://www.alberta.ca
Government of Alberta, (2010). Alberta’s oil sands. Retrieved from
http://www.oilsands.alberta.ca
Huang, Y.-F., Chen, C.-J., & Chang, H.-H. (2009). A multiple criteria evaluation of creative industries for the cultural creativity center in Taiwan. International Journal of Entrepreneurial Behaviour & Research, 15, 473-496. doi:10.1108/13552550910983031
Huang, I.B., Keisler, J., & Linkov, I. (2011). Multi-criteria decision analysis in environmental sciences: Ten years of application and trends. Science of the Total Environment, 409, 3578-3594. doi:10.1016/j.scitotenv.2011.06.022
Hurley, T., Sadiq, R., & Mazumder, A. (2012). Adaptation and evaluation of the Canadian Council of Ministers of the Environment Water Quality Index (CCME WQI) for use as an effective tool to characterize drinking source water quality. Water Research, 46, 3544-3552. doi:10.1016/j.watres.2012.03.061
Ishizaka, A. (2012). Clusters and pivots for evaluating a large number of alternatives in AHP. Pesquisa Operacional, 32, 87-102. doi:10.1590/S0101-74382012005000002
Ishizaka, A., & Labib, A. (2011). Review of the main developments in the Analytic Hierarchy Process. Expert Systems with Applications, 38, 14336-14345.
doi:10.1016/j.eswa.2011.04.143
Jafari, J., Khorasani, N., & Danehkar, A. (2010). Using environmental sensitivity index (ESI) to assess and manage environmental risks of pipelines in GIS environment: A case study of a near coastline and fragile ecosystem located pipeline. World Academy of Science, Engineering and Technology, 44, 1101-1111. Retrieved from
http://waset.org/journals/waset/
Jajimoggala, S., & Karri, R. R. (2013). Decision making model for material selection using a hybrid MCDM technique. International Journal of Applied Decision Sciences, 6, 144-159. doi:10.1504/IJADS.2013.053273
McCarthy, S. (2010, Dec, 21). Government’s vow to overhaul environmental monitoring of oil sands development. The Globe and Mail. Retrieved from
http://www.theglobeandmail.com
Mohebati, M. H., Maini, B.B., & Harding, T.G. (2010, October). Optimization of hydrocarbon additives with steam in SAGD for three major Canadian oil sands deposits. Paper presented at Unconventional Resources and International Petroleum Conference, Society of Petroleum Engineers Calgary, Alberta, Canada. doi:10.2118/138151-MS
Nicholls, T. (2010, August). The oil sands' environmental tests. Petroleum Economist. Retrieved from http://www.petroleum-economist.com
Owen, N. A., Inderwildi, O. R., & King, D. A. (2010). The status of conventional world oil reserves—Hype or cause for concern? Energy Policy, 38, 4743-4749.
doi:10.1016/j.enpol.2010.02.026
Podvezko, V., Mitkus, S., & Trinkūnienė, E. (2010). Complex evaluation of contracts for construction. Journal of Civil Engineering & Management, 16, 287-297.
doi:10.3846/jcem.2010.33
Pollard, S. T. (2009). Contributions to resource and environmental risk management. (Doctoral dissertation). Cranfield University, UK. Retrieved from
http://dspace.lib.cranfield.ac.uk/handle/1826/4563
Rasmussen, M. (2009). Foundations of GRC: Streamlining compliance. Corporate Integrity, LLC. Retrieved from http://www.sap.com/sapbusinessobjects/grc
Saaty, R. W. (2003). Decision making in complex environments. The Analytical Hierarchy Process (AHP) for decision making and the Analytical Network Process (ANP) for decision making with dependence and feedback. Pittsburgh, PA: SuperDecisions.
Saaty, T. L. (2006). Fundamentals of decision making and priority theory with the analytical hierarchy process, Vol. VI of the AHP Series. Pittsburgh, PA: RWS Publications.
Saaty, T. L., & Sagir, M. (2009). Extending the measurement of tangibles to intangibles. International Journal of Information Technology & Decision Making, 8, 7-27. doi:10.1142/S0219622009003247
Stewart, B., Archer, J., & Trynacity, K. (2010, June 25). Syncrude guilty in Alberta duck deaths. CBC News. Retrieved from
http://www.cbc.ca/news/canada/edmonton/story/2010/06/25/edmonton-syncrude-duck-trial.
Stoklasa, J., Jandová, V., & Talasová, J. (2013). Weak consistency in Saaty's AHP - evaluating creative work outcomes of Czech art colleges. Neural Network World, 23, 61-77. Retrieved from http://www.nnw.cz/
Wagner, J., & Armstrong, K. (2010). Managing environmental and social risks in international oil and gas projects: Perspectives on compliance. The Journal of World Energy Law & Business, 3, 140-165. doi:10.1093/jwelb/jwq002
Copyright of all articles published in IJAHP is transferred to Creative Decisions Foundation (CDF). However, the author(s) reserve the following:
- All proprietary rights other than copyright, such as patent rights.
- The right to grant or refuse permission to third parties to republish all or part of the article or translations thereof. In case of whole articles, such third parties must obtain permission from CDF as well. However, CDF may grant rights with respect to journal issues as a whole.
- The right to use all or parts of this article in future works of their own, such as lectures, press releases, reviews, textbooks, or reprint books.
- The authors affirm that the article has been neither copyrighted nor published, that it is not being submitted for publication elsewhere, and that if the work is officially sponsored, it has been released for open publication.
The only exception to the statements in the paragraph above is the following: If an article published in IJAHP contains copyrighted material, such as a teaching case, as an appendix, then the copyright (and all commercial rights) of such material remains with the original copyright holder.
CDF will receive permission for publication of copyrighted material in IJAHP. This permission is not transferable to third parties. Permission to make electronic and paper copies of part or all of the articles, including all computer files that are linked to the articles, for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage.
This permission does not apply to previously copyrighted material, such as teaching cases. In paper copies of the article, the copyright notice and the title of the publication and its date should be visible. To copy otherwise is permitted provided that a per-copy fee is paid.
To republish, to post on servers, or redistribute to lists requires that you post a link to the IJAHP article, which is available in open access delivery mode. Do not upload the article itself.
Authors are permitted to present a talk, based on a paper submitted to or accepted by IJAHP, at a conference where the paper would not be published in a copyrighted publication either before or after the conference and where the author did not assign copyright to the conference or related publisher.