• Due Diligence Can Equal Cost Savings

  • Time is money, and money means profit - who doesn’t love keeping hard earned cash in their pocket? Alberta’s upstream oil and gas industry is the same, they work hard for every dollar they make, so they must make each dollar count. We in the environmental industry are trusted to put those dollars to good use.

    Having worked in the environmental industry for over 17 years, I think it’s pretty evident that, consultants can deem ourselves “money managers” for our clients. We are allocated a certain budget and need to produce something tangible once the budget has been expended. I like to relate it back to buying your first car, you set a budget, then you need to find a car that will be functional, reliable, and fit within the budget. In our case, we are tasked with utilizing the budget in the most effective and efficient way, while still meeting or maintaining environmental regulatory compliance. We are trusted to put those hard-earned dollars to good use and look for opportunities where every nickel is spent wisely.

    So, what does due diligence have to do with cost savings and budgets? Well, I like to think it starts at the beginning. Using the upstream oil and gas industry as an example, more specifically an abandoned wellsite, the first step in progressing the Site to closure is to complete a Phase 1 Environmental Site Assessment (ESA). The purpose of a Phase 1 ESA is to determine the potential for environmental concern based on the historical and/or current Site activities. The basics of a Phase 1 ESA include:

    - Desktop file review of client and regulatory files
    - Aerial photograph review (historical and current)
    - Operator and/or landowner interviews
    - Site reconnaissance
    - Reporting

    Generally, these are completed at a relatively low cost to client, they have a quick turnaround time, and give a really good idea of what the overall potential environmental liability Company X may have – I’ll save that topic for another day.

    The key to a successful Phase 1 ESA, is the ability to track down historical information for the Site. Digging into client and regulatory files is necessary to ensure that we are not missing pertinent information that may be the difference between a Site passing or failing. In essence, we want to ensure that we have done our due diligence in finding records, that may prove the Site does not pose environmental risk, therefore eliminating the need for step 2 – Phase II ESA (intrusive investigation). Sometimes digging into those files takes a little more time, especially if they have been buried in the basement room at the end of the long dark hallway (speaking from experience here).

    Remembering that time equals money, when necessary, we can take that extra little bit of time (money) to venture down the hallway to find the records that proves the Site does not pose environmental risk. Then when we balance our budgets at the end of the day, we can show that the extra little bit of money (time) that was spent has resulted in a significant cost savings to the client, because we can skip step 2.

    Due diligence can equal cost savings, leaving those hard-earned dollars in the pocket.


  • Jennifer Fletcher, B.Sc., P.Ag.

    Jennifer is the Upstream Oil & Gas Course Instructor and Developer for AESAC Inc. and the Lead of Reclamation & Remediation–Environmental Operations at H3M Environmental.
    You can contact Jennifer at