Poor public image has cost oilpatch billions
'We have to regain out voice:' Producers group
Claudia Cattaneo, Financial Post
Published: Wednesday, November 07, 2007
The general view of the oil sector -- some of it showing up in its own opinion polls -- is that it's greedy, crooked, environmentally and socially irresponsible, unneeded and, technologically, a dinosaur.
Yet the industry can sincerely assert that it is generous, environmentally and socially responsible, honest, essential and smart.
Meanwhile, public perception is so low some are even getting away with calling it stupid. That's how journalist William Marsden labels oil companies in his recently published book on the oilsands, Stupid to the Last Drop.
Until recently, the oilpatch couldn't care less. Oilmen seemed quite content to go about the business of producing and selling oil, doing it as responsibly and as intelligently as possible, while keeping contact with the outside world -- i.e. most people outside Alberta unsympathetic to high oil profits --at a minimum.
All that changed in the past couple of years. Their poor public image -- sometimes fuelled by a few malcontents with Internet access and long distribution lists of politicians and the media, or low-budget environmental groups -- is costing them billions in adverse government decisions.
In the past year alone, the Canadian sector, or large factions within the sector, arguably lost every public policy battle it engaged in: It failed to sway the federal Tories to reverse their decision to tax oil and gas trusts; it lost the climate change debate; it lost the accelerated capital cost allowance federally and provincially; a consortium led by Imperial Oil Ltd. failed to convince the federal Tories they should gain fiscal breaks to build the Mackenzie pipeline; it lost the energy policy debate with Newfoundland and it lost the royalty debate in Alberta.
Of all those hits, the Alberta royalty battle cut the deepest, since oil companies never expected such a punishing blow from their own home team.
"The business community in Alberta should have recognized that Albertans' values have changed," said Heather Douglas, president of the Calgary Chamber of Commerce. "Citizens want transparency in communication, and the business community has to communicate what reasonable profits are."
But the royalty battle also provided the wake-up call that the oil industry needs to change.
"We have not been doing a good job," said Brian Maynard, communications vice-president at the Canadian Association of Petroleum Producers.
"We have to regain our voice. We have to talk to Canadians about the issues that matter to Canadians. We cannot let others that are opposed or have different views make statements that go unchallenged.
"But we are not going to turn this ship around overnight, either. We got here over a number of years."
Some would argue a whole century. To be precise, since the early 1900s, when investigative journalist Ida Tarbell exposed the ruthless and unethical practices of John D. Rockefeller and his company, the Standard Oil Co., the predecessor of Exxon Mobil Corp., in a series of magazine articles that eventually led to its breakup. Oil companies' reputation as "evil enterprises" stuck, said George Littel, a partner at Groppe, Long and Littel, an oil research firm in Houston.
More recent reasons are: It hasn't had to fight for its reputation, since its products sell themselves, oil companies are run by engineers, accountants or lawyers who don't generally value communications and it has relied on downward cycles in energy cycles to erase negative perceptions accumulated during the good times. But with oil prices continuing to rise, no one is buying such industry claims as tougher environmental guidelines are too expensive.
Meanwhile, the oil industry's traditional message, that it's contributing a lot to the economy, is losing its lustre.
"Canadians don't want to talk about money because the economy is on a roll," Mr. Maynard said.
"In Alberta, the economic message is actually counterproductive. In Alberta they want you to slow down."
The group is staffing up to launch a major long-term communications efforts on many fronts -- from empowering its employees to talk up the business, to working more closely with the media. If there is a silver lining, it's that Canada's oil industry's reality is better than the perceptions. This is no Exxon Valdez.
ccattaneo@nationalpost.com
http://www.canada.com/nationalpost/financialpost/story.html?id=7d09d2d2-...
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