PESTLE and the Gulf Oil Spill

This entry was posted by on Tuesday, 11 May, 2010 at

PESTLE analysis is a marketing planning tool that focuses on the external forces which affect a company. This type of analysis adds the additional factors, environment and law, to the basic PEST analysis which includes political, sociological, economic, and technological factors. Rapid Bi provides some detail about PESTLE and its numerous variations.

PESTLE provides information about the implications of the Gulf Oil spill for British Petroleum, which is responsible for this event, as well as its competitors and all of the other people and organizations along the southern coast of the United States and the eastern coast of Mexico. Politically, this crisis provides a major advantage to environmental groups who wish to reduce the oil consumption of the United States and other developed nations. New offshore oil drilling has already been suspended by President Obama, and this crisis has impressed the risks of petroleum extraction on many people around the world.

Economic factors come into play with the large oil spill. The cleanup costs will be paid by British Petroleum, likely raising the price of oil since the petroleum extractors will budget the likely cleanup costs and other expenses into their sale prices. Additional regulations that restrict the areas that companies can drill in reduce the total amount of oil that can be easily extracted, requiring additional extraction from remote areas and materials where extraction is difficult such as shale oil.

Sociologically, this spill destroyed the reputation of British Petroleum. The company’s greenwashing will not be effective now, and competitors like Shell must prepare for a consumer backlash that can easily effect them. This spill increases the motivation of consumers to buy renewable energy from various sources.

Technologically, the cleanup methods have not been effective at cleaning up the mess. This includes the gigantic concrete containment dome, which does not appear cheap to make. This accident provides much greater motivation for researchers to invent new methods of cleaning up an oil spill, such as bacteria that eat the oil.

Legally, there will be many new restrictions on oil extraction in the future. This might convince the public to support other measures such as carbon taxes and increased restrictions on coal mining, especially when the spill took place soon after the mine collapse disaster. Natural gas may also be restricted because Liquid Natural Gas Terminals provoke concern about explosion risk in coastal communities.

Environmental factors include each of the issues mentioned above. This oil spill is one of the milestone events, and similar disasters such as the sinking of the Exxon Valdez catalyzed the necessity of environmental management for the public and lawmakers. This disaster caused people to recall several other large incidents such as the oil spill off Santa Barbara and the large oil spill in 1979 in the Gulf of Mexico.

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