The Energy Information Agency projects that global energy
consumption will increase 56 percent by 2040. Yet, energy
companies' collective failure to engage proactively with a global
population jeopardizes sustainable energy solutions and hydrocarbon
development. This shortsightedness presents strategic risks
for energy companies and global energy consumers.
This is not simply a "dirty" energy problem, though oil and gas
easy targets. A 2011
study identified 351 US energy projects that were delayed or
abandoned due to public opposition or regulatory issues; 45 percent
were renewable energy projects. Globally, there is growing
opposition to windpower, biofuel
solar energy solutions. Australia's goal to generate 20
percent of its electricity from renewables by 2020 is
threatened by windpower opponents. Biofuels raise
sustainability and cost issues. Solar development on
public lands in the western US has encountered strong
opposition. And these are day-to-day issues, not reactions to
world-changing events such as the Deepwater Horizon spill or
To mitigate future strategic risks, energy leaders might
consider the following points:
- Think strategically. "Community Relations" should be a
subset of "global relations." A local and global divide is
increasingly artificial. Local issues can rapidly become
global issues so the more productive approach might be to start at
the macro level.
- The public are consumers. The relationship between energy
producers and consumers is unlike most market relationships; this
diffuses the industry's sense of serving customers. The lack
of a direct relationship creates an "us/them" mindset and
complicates consumers' abilities to hold producers accountable;
thus, energy producers typically lack incentives to embrace the
public as consumers. One notable exception was the Brent Spar
incident when a boycott of its products led Shell to reverse its
decision to sink an aging platform at sea. A public boycott
would be even easier to organize in today's digital world.
- On a related note, energy consumers will be the real victims of
energy sector shortsightedness, not the energy industry.
Missing is acknowledgment and understanding that the energy sector
provides services to the public.
- Embrace social media; be active social listeners and active
participants in public discourse. The energy industry
currently reacts rather than proactively engages the global public
in meaningful ways. Perception is reality - and perception
management is not something to be neglected until there is a public
incident. Energy companies and projects are captive to
information cascades that can turn "quiet doubts into open
skepticism and reluctant accommodation into passive
resistance." Social media is a critical vulnerability for the
energy sector, so influencing information cascades must be a core
communications competency of energy executives.
- CEOs must engage early and continuously to generate public
awareness. Public engagement cannot be outsourced to PR
firms. Reactive approaches cede the tone and form of social
discourse to opponents who may not accurately represent issues or
the science behind issues.
- Support informed discussions and an informed public.
Current information campaigns are largely lobbying activities; they
are industry-centric rather than addressing serious public concerns
about the future. And there is a credibility issue,
particularly with the oil and gas sector. Passive one-page
print advertisements are ineffective. Without continuous and
credible senior-level engagement, public information campaigns like
"We Agree" campaign appear disingenuous and provide fodder for
commentators and activists.
- Industry associations must actively engage the public.
Associations can fill a public information void and provide depth
to renewable energy companies', smaller exploration and production
companies' and utilities' public information efforts.
- Partnering with environmental groups to develop policies that
mutually serve the public and the energy sector works.
CASE (Clean and Safe Energy) educates people on nuclear energy
(one of its co-chairs is a Greenpeace founder). Similarly,
industry partnered with environmental organizations in the US to
codify hydraulic fracturing best practices.
- Stop saying NIMBY (Not in My Backyard). It understates
and misstates issues, particularly when non-local opponents are
involved, and disparages those affected by a proposed energy
project. Industry empathy is more meaningful than
- Finally, honesty truly is the best policy. There is no
room for obfuscation, incomplete answers, boilerplate or
disingenuousness when dealing with the global public.
Energy companies are still largely wedded to
20th century global stakeholder engagement approaches in
a dynamic, digital 21st century world. The old
rules of influence no longer apply. "Transparency, community
building, preemptive engagement are all parts of the emerging
stakeholder multi-polar world with which energy projects and the
companies that build them must contend," writes Peter Gardett, of
Breaking Energy. Energy companies are certainly
challenged to build public trust and confidence - yet this is an
absolute imperative to meet 2040 global energy requirements.
Failure to focus on this jeopardizes future energy development and
increases strategic risks for energy companies and global energy