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SPEAK UP (OR LET YOUR CRITICS DO IT FOR YOU)
by Richard R. Loomis
Contributor, World Energy Source
October 9, 2007

Many times I have written about the need for a better image for the energy industry. The need to work on this seems obvious to me and to others within the industry as we face an aging workforce, the threat of more regulations, increased taxes and an ever-increasing demand curve. However, each time I broach this subject with one of the authors for World Energy magazine, I get an acknowledgment of the problem and a hearty �good luck� doing anything about it. The industry�s image oscillates only from bad to worse. However, this is still the largest industry on the planet, and it is arguably the most important when it comes to solving the problems we face as population grows.

What fuels this malcontent for the industry? How can the obstructionists or those who wish to detract from this industry perpetuate this dark image? To understand the issue, we have to look at the tools being used against us.

Let's begin with a look through our Netflix list.

Each of these movies did respectable business for its studio, whether in wide release, on cable or broadcast television, or even in YouTube appearances. Appropriately, the studios have figured out that the energy industry (specifically, the collection of fat cats who occupy the executive suite) makes a darn good antagonist. Nothing personal, of course. As the old adage goes, that's why they call it show business. Hollywood is in the business to make money, and right now the smart money is on the vilification of industry in general and the energy industry in particular.

Certainly it's an easy sell to the viewing public when the price of gas is advertised on every street corner in America. A built-in audience consists of people who must line up at the pump to pay $3 a gallon to power their car. Pumping away, the public has plenty of time to ponder the vagaries of the �price-gouging oil companies.� And the print media is helping in that quest. A Nexus search of �oil companies� and �price gouging� turned up about 1,000 results between September 2006 and September 2007.

It is human nature, of course, to look with suspicion upon people and things that project great power. Indeed, �energy is fundamental to the way we live every day,� Lane Sloan, coauthor of Terra Incognita: A Navigation Aid for Energy Leaders, told World Energy Monthly Review. �This leaves the public sensitive and hopelessly vulnerable to any availability and price issues. As the biggest industry in the world, people resent the immense size and perceived economic and political power. And of course, the tainted industry history, starting with the infamous antitrust case against Rockefeller�s Standard Oil Trust, does not help.�

Sloan makes a good point. Pretty much any move an oil company makes is bound to draw headlines, as when BP �ignored Illinois in planning an expansion of its Whiting, Ind., refinery that would lead to more pollution in Lake Michigan,� as Crain�s Chicago Business put it. �BP apparently didn't understand how Chicagoans treasure the lake. An uproar led by Illinois politicians forced London-based BP to back down [in late August], but not before the episode ripped a hole in its carefully crafted public image as the oil company that cares about the environment.�

BP�s blooper is just one example of how energy companies � from the supermajors to the independents � are not in the habit of presenting a pleasing public face. Indeed, when the words �public relations� are used in reference to many companies, they are often followed by the word �disaster.� Americans tend to hear only the bad news from our industry � or worse, no news at all.

When corruption enters the picture, the black eyes continue. In July, according to Oil Daily, Alaskan officials launched a probe that �led to guilty pleas from two oil service company executives for buying votes in favor of a tax regime backed by the oil industry.� That only exacerbated the fact that the industry�s �public image in Alaska is in the dumpster, and this has smaller, independent companies concerned that the legislature could drive up the cost of exploration and development in the state.�

Recently I asked Matthew Simmons, author of Twilight in the Desert and chairman of the investment firm Simmons & Company, why he thought oil and gas companies had such a hard time standing up for themselves. His answer: �I have never understood why the leaders of the big oil companies have been so inept at public relations. It has nothing to do with a need for confidentiality. Maybe some of it has to do with the deeply embedded suspicion by too many folks that the energy companies are somehow �evil� and are always trying to gouge the public and do harm to the environment. Rather than confronting these false impressions aggressively, the industry leaders have tended to go into their insular caves.�

Can�t Win for Losing

After years of maintaining a no-comment philosophy, the industry has been trying of late to work the crowd a bit more effectively. �We recognize that we need to soften our public image. It is something we are working on,� Rex Tillerson, CEO of ExxonMobil, told the U.K.�s Guardian newspaper.

Good luck with that. Last November, the American Petroleum Institute announced a new campaign to lift the industry�s reputation � reportedly hiring the same PR firm that launched the $10-million-a-year �Got Milk?� campaign. �The ads will attempt to convince Americans that high energy prices are not the result of some industry conspiracy but rather an effect of tight supply and high demand,� noted CNN.com, citing the Wall Street Journal. �The goal, according to the paper, will be to avoid higher taxes on energy companies and make it easier for them to drill in areas like the Rocky Mountains or off the coasts.�

Critics were quick to respond. �One of the reasons the oil industry can afford its new public relations spending spree is the fleecing it's pulled on the American taxpayer with the active help of the Bush administration,� said Tyson Slocum of the nonprofit Public Citizen�s Energy Program.

Christopher Ross, vice president of CRA International and coauthor of Terra Incognita: A Navigation Aid for Energy Leaders, reminded us that �several CEOs have become more outgoing over the past year in an attempt to put the industry�s case forward, but there are always anti-trust concerns that limit the scope of comments regarding the market or competitive issues. Often, these concerns result in statements that become bland and lack impact.�

Ready for Your Close-up?

So the news is either nonexistent, lacking in impact or just plain bad. Where do we start? One thing to consider is where are we today. In 1995 the Oklahoma Resource Board did a study that looked at the image of the industry. They concluded that only 22 percent of people in Oklahoma had a positive image of the industry. Changing this opinion seemed like a daunting task.

However, 12 years later the board's results have been impressive. Currently 44 percent of Oklahomans hold the viewpoint that the industry is improving. Sixty-three percent said they would like their children to consider a career in the oil and gas business. Now, of course, you�d expect that answer in oil-rich Oklahoma, right? Well, 54 percent of those polled in relatively dry Colorado also said they would like to see their kids choose a career in the oil and gas industry. Seventy-nine percent of those polled nationally said the oil and gas industry was very important to the country.

A pessimist would say these numbers still are not good enough to risk going out and being seen. However, we should remember that the Zogby poll on September 19 of this year put the U.S. Congress� approval rating at 11 percent and President Bush�s at 29 percent, and they don't have any problem trying to lead all of us. Recently, this Congress tried to pass an immigration bill that prompted citizens literally to shut down the congressional switchboard with calls to stop them from taking this action. The energy industry�s approval numbers are so much higher than those of Congress that we might actually have been able to pass a few bills if we�d had the American public call Congress on our behalf.

The way the media machine paints our industry, we might assume that we have no power at all. Over the years the University of California Energy Institute has been polling the California public on their opinions toward the industry. The earliest Field Poll question about offshore oil drilling was asked in 1977. Respondents were asked to agree or disagree with the statement, �Oil companies should be allowed to drill more oil and gas wells in state tidelands along the California seacoast.� By 1989, only 21 percent of those polled agreed with this statement. Still not as bad as Congress, but not too good either. However, between 1999 and 2001 that number jumped to almost 45 percent agreeing with that statement. That is nearly a 100 percent increase � and this in California!

What caused this dramatic increase in �love� by the California people? No one knows for sure, but the curve tracks dramatically close to the increase in gasoline prices to nearly $2.00. One has to wonder why the study was discontinued and what those results would show today at $3.00 and higher at the pump. This is the same number that causes Congress to hold hearings on price gouging and the media to start claiming that the �public� doesn't trust oil companies. Perhaps the media is not being entirely honest with us.

Both Sides Now

What is the answer? Can we turn the media giant to our advantage? Here at World Energy, we have been in the business of offering the other side of the argument. In our publications, World Energy magazine and here in World Energy Monthly Review, we strive to tell the stories that most Americans do not get from mainstream news and entertainment sources.

With that in mind, we launched World Energy Television in 2001. Alone among broadcast energy shows, World Energy Television is neither a muckraking enterprise nor an infomercial. We take an agnostic stance on the energy issues. By this I mean that we are not in the business of promoting a certain company or product. Instead, we provide an open forum for the men and women of energy to tell their side of the story.

That position in the information arena has attracted notable guests to World Energy Television. Along with the CEOs of several energy companies, guests on the show have included Sen. Jeff Bingaman (D-N.M.), Sen. Mary Landrieu (D-La.) and investor Matthew Simmons. Association executives like Bob Grecco of API, Tom Fry of NOIA and Bill Stevens from the Texas Alliance of Energy Producers have made appearances. Industry leaders like John Gibson, Tom Halbouty, Robert Mosbacher and George Mitchell have been on the show.

People are getting the message. Gaining buzz in a medium as widespread as the Internet is not easy and does not happen overnight, but the World Energy Television series for 2007 continues to draw new attention. This year, with virtually no advance publicity for the two series we produced, World Energy Television broke some important ground:

Does everyone who tunes in, downloads or streams World Energy Television agree with the views of our guests? Of course not. But the fact that people are beginning to pay attention bodes well for the energy debate. In addition, as the largest industry on the planet, if we turn our eyes toward quality programming we can make a difference. The production companies pay attention to ratings, so if we watch, we can move the needle.

What makes these shows so special? The format seems to resonate with the viewer. They are 30-minute roundtable discussions about the issues that surround the energy business but are not specifically about energy. For instance, in the show �Mergers and Acquisitions: How Big Is Too Big?� we address the business of growing companies through acquisition. While it is a topic that certainly pertains to the energy industry, it is also one that every businessperson needs to face if he or she is going to grow his or her business. In our show �What about the Water?� we look at the rights of surface owners versus mineral owners in the state of Texas. This is an age-old battle and one that surfaces often among ranchers, farmers, landowners and home owners alike. By showing the viewers that the energy industry faces many of the same issues they do, and by allowing them to watch actual discussion among the participants, World Energy Television attracts and keeps the viewers.

Better yet, it turns out that we are more likely to be believed than our own government, so now is the time to get out there and be seen. We need to take advantage of the best approval ratings in the history of the industry to speak directly to the consumers and create a call to action. We need to use the mass media of television, radio and print to carry this message to a general public that will be receptive to the message, or at least more believing of us than they are of others. As an industry, we can turn the tools that the obstructionists have used against us to now carry our message. We have shown that we can create quality television that will attract viewers. World Energy magazine boasts a distribution where a full third come from outside the industry.

Lights, Camera �

Let's show Hollywood how to make money creating movies and programming that supports our industry; they will follow us gladly looking for the next big breakthrough. Leadership in the media realm will carry our message without a filter to the end user. Perhaps Chevron should have made a bid for the Wall Street Journal; we have much more credibility than Rupert Murdoch. However we choose to act, the important thing is to act. Now is not the time to sit on the sidelines. We need to be creating the programming that will carry the message.

So here is my open call: Let us build the �coalition of the willing� and take the message to the public. Join World Energy in bypassing the traditional media and use the media tools to carry our message to a willing audience � the general public. Let's do movies, TV shows, magazine articles, radio interviews and more. Let's solicit studios with great movie ideas and let them make money. Let's move the American public to tell Congress what they want: inexpensive, clean energy to fuel the greatest economy on the planet. Imagine the next time Congress wants to shut down progress for the industry and the American public shuts down the switchboard to tell them to change direction.

In an ideal world, the energy industry would develop a new mindset aimed at building a value bank with the public. �This means getting out and developing a dialogue even when there is not a burning issue like a refinery explosion or environmental mishap,� said Sloan. �It's not just talking, though; it is doing.�

Today, the public fully expects the industry to be socially and environmentally responsible. The more the public sees the industry tackling the sustainability problem, the more value will be banked in the relationship.

What We're Up Against

�The taking over of young minds in schools by the environmentalist groups, unanswered, has been occurring for 20 years. Occasional serious incidents create an adverse impression of an industry that, in fact, is fully committed to safe, environmentally sound operations, and the industry has failed to create a countervailing public understanding of the benefits of their activities. Similarly, technology has been associated in the public�s mind with the phenomenal advances in telecommunications and medical science, which are much more visible to the public than the equally impressive but often unnoticed advances in the energy sector.�

� Christopher Ross, coauthor,
with Lane Sloan, of Terra Incognita

Who's Got It � and Who Doesn�t

�I would give the best public relations award to Chevron on the ads it is running hinting that the era of easy-to-grow oil is over and whispering almost that peak oil output is approaching,� says Matt Simmons.

�John Hofmeister, president of Shell Oil Company, has been a pacesetter with his 50-city tour to meet with community leaders and policymakers,� says Lane Sloan. �His theme of �energy security through energy diversity� resonates with the public.�

Conversely, says Simmons, �BP gets the booby prize
for its massive ad campaign of �Beyond Petroleum� while
it ruthlessly cut costs to the bone and allowed pipelines and refineries to leak.�

Voices from the Fray

�An oil-industry spin doctor is probably not high on peoples� list of trustworthy people. Probably ranking even lower than real estate agents, journalists and politicians. So you should always take what they say with large doses of salt ... especially when the spin doctor works for Exxon.�

� blogger Andy Rowell,

posted on Oil Change International

�We surveyed Americans one and a half years ago and learned our industry�s credibility was at the very bottom, below that of Big Tobacco.�

� Bob Ridge, vice president of health,
safety and environment for
ConocoPhillips, quoted in
the Macon Telegraph (Sept. 7, 2007)

�Ask execs at some top-flight creative agencies (who are responsible for some big-budget, glitzy Super Bowl ads), and they�ll launch into the type of spin used by oil companies when they say more study is needed on global warming.�

� Burt Helm, writing in Business Week
about ad campaigns (Sept. 3, 2007)

© 2007 Richard Loomis
Editorial Archive

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