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Top1. Introduction
The oil and gas industry is vital to the United States (U.S.) economy supporting nearly 10.3 million jobs in the US and nearly 8% of the nation’s gross domestic product (American Petroleum Institute [API], 2018). The oil and gas industry spurs global economic growth in both developed and developing countries by supplying 57% of the commercial energy between 2015 and 2018 (British Petroleum, 2019). Approximately 10% of the value of the world’s stock markets is invested in the oil and gas industry (Deloitte LLP, 2015). To continue to support and expand the industry, the oil and gas trade operates by engagement of exploration, production, refinery, storage, transformation, marketing and serving activities. However, recent degradation of the natural environment raises concerns among corporate America and in turn, companies are starting to realize that sustainable development is the unmistakable pathway for all firms who are currently leaving irreversible environmental footprints on Earth (Bhowmik et al., 2000, J. Gonzalez-Benito & O. Gonzales-Benito, 2005, Yurtsever & Firat, 2019). Industrial companies such as those in the oil and gas industry are, to a great extent, responsible for this degradation and must strategically aim to enhance their corporate social responsibility by going beyond profits (Arya, et al., 2019; Tung, et al.,2014). While governments hold primary responsibility to prioritize and incentivize while promoting sustainable development and growth, the private sectors and civil societies are critical stakeholders to carry on (Carmichael, 2019; Geels, 2002; Geels, et al., 2017; Nelson & Allwood, 2021).
The historical technological advancement in the oil and gas industry has always been accompanied with systematic industrial changes. America’s oil and natural gas industry spends an average of $227 billion in investment on America’s infrastructure annually (International Energy Agency [IEA], 2020). According to Deloitte LLP (2015), investments in the oil and gas industry range from “mega” to “minor”. For example, Deloitte LLP (2015, p.14) reports “as of March 2014, the world’s four biggest super-major oil and gas companies were spending roughly 40% of their capital budgets on megaprojects (those with capital investments of $1 billion or more)”. Notably, it mentions that a full 50% of 40% of the capital budget goes to technically complex projects, such as the Gorgon LNG project in Australia, the Pearl GTL project in Qatar, the Kashagan project in the Caspian Sea and the Sakhalin project in Russia. The remaining budgets go to minor projects such as Integrated Project Delivery (IPD) which aims to improve collaboration across the supply chains, Advanced Analytics Project which relies on “big-data” to identify critical factors in the decision-making process, and other projects which mainly improve process rather than develop breakthroughs in technological advancement. For instance, the depletion of light oil reserves has caused the change in the average crude quality. As a result, refineries had to upgrade their physical plants, properties, and equipment to deal with the low API gravity and impurities problems. The investment decision (i.e., major vs. minor) is a challenging operation issue unavoidable for oil and gas companies (Deloitte LLP, 2015).