PESTEL Analysis
Factors Descriptions
Political - There are 3 states surrounding the Michigan Lake, making the approval of the plan
more complicated
- While the IDEM and EPA approve BP expansion plan, most citizen and other NGOs
were opposed of the plan fearing it would harm the environment of the lake and
the communities surrounding it
- Mayor of Chicago pledged to make Chicago the ‘greenest’ city in America
- Chicago residents and politicians invested millions of dollars to clean up Lake
Michigan, develop environmentally sustainable business practices, and constructed
the highest number of environmentally-friendly building projects in the US
- Mayor of Chicago, democrats and republicans were against the plan of BP. Political
parties threatened to take legal actions to block the permit.
- The U.S. Congress overwhelmingly passed a “resolution’’ to urge the EPA to
reconsider issuance of the permit
- Impact of adverse event on BP’s reputation and engagement with other oil rich
regions: green policies, environmental regulation
Economic - Regional and global consumer demand for gasoline was rising, which helped push
prices toward record highs
- Global demand for oil was expected to double between 1980-2004 and 2004-2030
- The initiation of the plan can certainly create thousands of jobs as well as economic
benefits to the surrounding societies
- Impact of cost associated with previous scandals: environmental clean up,
damages, litigations, research and development
Social - The US social trend is against the expansion of BP in Whiting as it causes
environmental harm to the environment
- Social opinion mostly is against the plan due to environmental concern
- Impact of previous adverse events on BP’s reputation
Technological - The technological development of Oil refining presented environmental concerns
- The imported oil from Canada required complex operation as well as an increase of
, 34% of the discharge of ammonia and 54% increase in Total Suspended Solid.
- The firm invested $3.8 billion to improve capacity and technological aspect of the
refinery but it did not lower the level of discharge into the environment
Environmental - Thousands of citizens, a host of environmental groups, national politicians were
opposed to the expansion for fear of increasing pollution in Lake Michigan
Legal - The legal system requires both state governments and citizens to approve the plan
- The approval process is complicated and lengthy
- The law established a certain level of discharge that BP are allowed to operate in
the US. The firm claimed that it satisfied all requirements from the EPA and the
IDEM with its waste management plan.
- BP plan, in term of its environmental impacts, fit the laws of Indiana which was
claimed to be tougher than federal law
- Federal Indiana lawmakers met the CEO of BP to pressure him to stop the plan
Indication from the PESTEL analysis
- In almost every aspect, the BP plan to expand to lake Michigan was opposed by the public and major
government agencies
- The environmental concern from the people of the states around the lake posed the biggest threats
towards the expansion plan
- However, the BP plan and its environmental impacts projection fitted with almost all requirements
of federal law as well as states’ regulations
- The economic impacts that the plan, should it be proceeded, is tremendous to the different states
surrounding the lake, especially Indiana as the direct recipient of the economic benefit
- The overall demand for oil and its related product from the market standpoint urges the expansion
of BP in the lake area as supplies can and will significantly increase to match demand surplus
- To conclude, the economic benefits that the plan brought forth are the main reasons for some
government agencies to approve the plan. However, the potential environmental impacts, while has
been examined and approve by government agencies such as IDEM and EPA, posed great concern
and opposition from the public.
Factors Descriptions
Political - There are 3 states surrounding the Michigan Lake, making the approval of the plan
more complicated
- While the IDEM and EPA approve BP expansion plan, most citizen and other NGOs
were opposed of the plan fearing it would harm the environment of the lake and
the communities surrounding it
- Mayor of Chicago pledged to make Chicago the ‘greenest’ city in America
- Chicago residents and politicians invested millions of dollars to clean up Lake
Michigan, develop environmentally sustainable business practices, and constructed
the highest number of environmentally-friendly building projects in the US
- Mayor of Chicago, democrats and republicans were against the plan of BP. Political
parties threatened to take legal actions to block the permit.
- The U.S. Congress overwhelmingly passed a “resolution’’ to urge the EPA to
reconsider issuance of the permit
- Impact of adverse event on BP’s reputation and engagement with other oil rich
regions: green policies, environmental regulation
Economic - Regional and global consumer demand for gasoline was rising, which helped push
prices toward record highs
- Global demand for oil was expected to double between 1980-2004 and 2004-2030
- The initiation of the plan can certainly create thousands of jobs as well as economic
benefits to the surrounding societies
- Impact of cost associated with previous scandals: environmental clean up,
damages, litigations, research and development
Social - The US social trend is against the expansion of BP in Whiting as it causes
environmental harm to the environment
- Social opinion mostly is against the plan due to environmental concern
- Impact of previous adverse events on BP’s reputation
Technological - The technological development of Oil refining presented environmental concerns
- The imported oil from Canada required complex operation as well as an increase of
, 34% of the discharge of ammonia and 54% increase in Total Suspended Solid.
- The firm invested $3.8 billion to improve capacity and technological aspect of the
refinery but it did not lower the level of discharge into the environment
Environmental - Thousands of citizens, a host of environmental groups, national politicians were
opposed to the expansion for fear of increasing pollution in Lake Michigan
Legal - The legal system requires both state governments and citizens to approve the plan
- The approval process is complicated and lengthy
- The law established a certain level of discharge that BP are allowed to operate in
the US. The firm claimed that it satisfied all requirements from the EPA and the
IDEM with its waste management plan.
- BP plan, in term of its environmental impacts, fit the laws of Indiana which was
claimed to be tougher than federal law
- Federal Indiana lawmakers met the CEO of BP to pressure him to stop the plan
Indication from the PESTEL analysis
- In almost every aspect, the BP plan to expand to lake Michigan was opposed by the public and major
government agencies
- The environmental concern from the people of the states around the lake posed the biggest threats
towards the expansion plan
- However, the BP plan and its environmental impacts projection fitted with almost all requirements
of federal law as well as states’ regulations
- The economic impacts that the plan, should it be proceeded, is tremendous to the different states
surrounding the lake, especially Indiana as the direct recipient of the economic benefit
- The overall demand for oil and its related product from the market standpoint urges the expansion
of BP in the lake area as supplies can and will significantly increase to match demand surplus
- To conclude, the economic benefits that the plan brought forth are the main reasons for some
government agencies to approve the plan. However, the potential environmental impacts, while has
been examined and approve by government agencies such as IDEM and EPA, posed great concern
and opposition from the public.
