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Page added on May 13, 2017

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The oil and gas industry has a problem – and the industry knows it

Business

Oil and gas company executives believe that they’re doing right by the world. Most people disagree.

In a survey conducted by the consulting firm EY, 75 percent of oil and gas executives rated themselves as good corporate citizens. But only 37 percent of the general public said the oil industry can be trusted to do the right thing.

The average people surveyed viewed renewable energy far more positively than oil, with natural gas falling somewhere in the middle. Only 14 percent of them thought oil and gas should be our primary source of energy, while 29 percent thought it shouldn’t be. The rest were willing to tolerate it until alternatives are available.

That’s nothing energy companies don’t already know. Of the 109 executives surveyed by EY, just one in four said their industry had the public’s trust.

That dim view is starting to matter now, EY says, because so much energy production happens on American soil. Negative perceptions of fossil fuels – fed by movies such as “Deepwater Horizon,” widespread coverage of Exxon Mobil’s efforts to discount climate science, and painful layoffs during the oil bust while CEOs of bankrupt companies made off with millions – are starting to influence both public policy and industry recruiting efforts.

Many young people would rather work for tech companies that they believe are operating in the public interest.

It’s something the EY consultants like to call an industry’s “social license to operate.” Come off as too evil, and eventually the walls cave in. “This is a call to action,” Deborah Byers, EY’s U.S. energy leader, said at an event unveiling the research.

So, is there anything the oil industry can do to solve the problem?

The EY consultants suggest the oil industry’s problem is one of perception. If only people knew what executives knew, they wouldn’t be so eager for a quick transition to wind and solar.

“They don’t have as many of the facts,” said John Hartung, a U.S. strategy principal with the firm who spent 11 years at Mobil before it combined with Exxon. “The executives have run the numbers, and the younger generations have not.”

But consumer perceptions seem based on facts, too. It’s a fact that the Earth is warming fairly quickly now and scientists attribute most of the blame to carbon emissions from fossil fuels. It’s a fact that oil spills have caused enormous damage to coastal environments. It’s a fact that air quality regulations and more efficient cars, which the oil industry hasn’t exactly championed, have meaningfully improved life in cities around the world.

Rather than a perception problem, the oil industry would seem to have a behavior problem. Some companies, like BP and the French company Total, have taken actions that conform with popular desires for cleaner power, shifting their portfolios away from oil and toward lower-carbon sources of energy, including natural gas.

It’s a lot easier to fix your message when you have something real to talk about.

Chron



26 Comments on "The oil and gas industry has a problem – and the industry knows it"

  1. Midnight Oil on Sat, 13th May 2017 9:43 am 

    Going out of Business is not a good business model. Staying in business and causing Global Warming isn’t either!

  2. Cloggie on Sat, 13th May 2017 12:09 pm 

    Adding insult to injury, here two “mega-predictions” (with which I agree, otherwise I wouldn’t post it):

    1. by 2030, 95% of the population won’t own a car, causing car industry death spiral
    2. by 2030, an electric vehicle fleet will devastate the global oil industry (making peakoil concerns a mockery)

    https://cleantechnica.com/2017/05/12/tony-seba-2030-95-people-wont-private-car-automaker-death-spiral-coming/

  3. Kenz300 on Sat, 13th May 2017 1:10 pm 

    Clean energy production with wind / solar and battery storage.

    Clean energy consumption with electric vehicles.

    That is a future we can all live with.

  4. rockman on Sat, 13th May 2017 1:34 pm 

    “But only 37 percent of the general public said the oil industry can be trusted to do the right thing”. Define the “right thing”. So far the public seems to define it as their being supplied with as much petroleum as possible at the lowest price.

    “Only 14 percent of them thought oil and gas should be our primary source of energy, while 29 percent thought it shouldn’t be.” And without a doubt every one of those 29% consume a per capita share of petroleum larger then any other group of citizens on the planet.

    “The rest were willing to tolerate it until alternatives are available.” Tolerate??? I think he meant “demand”. What the have tolerated was spending $trillions of tax $’s and the lives of thousands of our military to fight in ME oil wars. But feel free to disagree if you want to argue it was really done to “export democracy” to the region. LOL.

    “…are starting to influence both public policy…” Name just one “public policy” that has any impact of US oil production (which recently almost matched the all time record high). Or on imports that hit 2.0 BILLION bbls in 2016 and currently increasing. Or refinery exports such as the record 1.1 BILLION BBLS in 2016. Exports that have significantly boosted profits. Or in 2016 the import of an all time high of 1.1 BILLION BBLS in of Canadian oil, the “dirtiest oil on the planet”. Or President Obama policies of supporting the building of the southern legs of Keystone XL Pipeline that eliminated the Cushing choke point which allowed that 2016 record which was aided his approval permits to expand capacity on other existing border crossing pipelines. Or his policy of approving drilling permits for wells in the same area as the Macondo blowout…the worst oil spill in US history. Or approving permits for 14 new oil producing facilities in the Gulf of Mexico since the catastrophe. Or President Obama’s policy of exporting more US coal in one year then any other POTUS in history which was aided by approving expansion of Texas terminals which allowed him the export more coal.

    There’s quite a few more I could list. But I’ll stop now and wait to see what other EFFECTIVE public policies that have been in acted to diminish petroleum industry activity. There must be more then a few since the public is so adamantly opposed to petroleum production and consumption. LOL.

  5. bobinget on Sat, 13th May 2017 6:44 pm 

    Think about this possibility, three years into the future. It’s very possible US demand could increase by 3 M B p/d. (23 M p/d) It’s also possible, production decline could be 3 M B p/d.

    That leaves us short XX M B p/d +/- in three years – Where is that (extra) oil coming from?

    If an major off-shore (Arctic) discovery were to happen today, surly, we could have pipelines, loading facilities in place by 2025 ?

    Now, one begins to understand how much we take under priced Canadian crude for granted.

    How unlimited liters of other people’s blood we are willing to spill to keep that Saudi ‘Coalition’ oil coming.

  6. eugene on Sat, 13th May 2017 6:51 pm 

    I find blaming the energy industry interesting. For decades we all joyfully consumed all we could lay our hands on and screamed for more. Now we blame somebody else for that which we participated. As far as renewables, I suspect they will be a major disappointment. On the other hand a drowning man thinks a board floating by is salvation.

  7. Davy on Sat, 13th May 2017 7:00 pm 

    “Think about this possibility, three years into the future. It’s very possible US demand could decrease by 3 M B p/d.” Because of a global recession.

  8. Davy on Sat, 13th May 2017 7:17 pm 

    Bob, chew on this and get back to me:

    “Why US Investors, And Especially VIX Sellers, Should Care About China In 1 Simple Chart”
    http://tinyurl.com/mjgfv4k

    “UBS Reveals Who Was Responsible For The Global Reflation”
    http://tinyurl.com/msyzucg

    “China’s Credit Excess Is Unlike Anything The World Has Ever Seen”
    http://tinyurl.com/jwjwavg

    “UBS Calls It: “The Global Credit Impulse Suddenly Collapsed To Negative”
    http://tinyurl.com/kdrybl2

    “As Citi concludes, tighter monetary conditions in China, if sustained, may mean that the period of unexpectedly strong Chinese activity growth, which started in 2016 Q1, is coming to an end.”

    “China’s contribution to the broader global recovery may be waning. Further legs to the global reflation theme may now rely even more so on the Trump administration’s ability to deliver on key campaign promises, and given this week’s debacles, those seem less likely than ever. And the bottom line is simple – and even if China folds on its monetary tightening path, the next phase of volatility is baked into the cake.”

  9. makati1 on Sat, 13th May 2017 9:32 pm 

    “Duterte: China’s One Road project will boost regional ‘connectivity’”
    ““Friends” Xi and Putin to meet next week in China”
    “Xi meets world leaders ahead of economic forum”
    “Will launch joint research with China: Japan’s Finance Minister”
    “UN to increase cooperation with China”
    “One Belt, One Road Project is Making the World a Safer Place”

    When will Russia and China pull the plug on the USD? Soon, I think. They are setting up an alternative system that avoids the USD. And … hording gold like there is no tomorrow. Someday, Americans will wake up and see that they rally live in the 3rd world.

  10. Cloggie on Sun, 14th May 2017 5:17 am 

    Netherlands in the forties, only the Germans had cars. In the end we would all be speaking English rather than German (as a second language):

    http://tinyurl.com/mlt44tz

    Netherlands in the fifties, nobody had a car:

    http://toenwasalmelonogmooi.nl/images/grotestraat%20noord%2050a.jpg

    This is how an average Dutch street looks like since the eighties, when everybody has a car:

    http://tinyurl.com/l9fp2sr

    This is how Dutch streets could look like again after 2030, when the streets will no longer be littered with parked cars, that aren’t used 95% of the time anyway and the autonomous car will have been adopted as an extension of the public transport system, eliminating the need for private car ownership, greatly relieving family budgets:

    http://www.drechtstad-automatisering.nl/wp-content/uploads/2016/04/cultureel-img-900×600.jpg

  11. Davy on Sun, 14th May 2017 6:04 am 

    References madkati????

  12. Davy on Sun, 14th May 2017 6:10 am 

    “autonomous car will have been adopted as an extension of the public transport system, eliminating the need for private car ownership, greatly relieving family budgets”

    Autonomous cars are a product of affluence and affluence is clearly set to drop precipitously someday but at least in the near term less resources will go into what we can’t afford or don’t need. We need autonomous cars like we need more Disney Worlds. I agree cars ownership and use will change. Discretionary driving to go and do discretionary consumerism and leisure will end soon. The greatly reliving of the family budgets will be the black hole of decline.

  13. Cloggie on Sun, 14th May 2017 6:10 am 

    It is easy to find back the links with Google.

    Makati probably has enough of captcha errors, preventing posting too many links at the same time (you can circumvent that by posting your large post with links in “parts”).

  14. Davy on Sun, 14th May 2017 6:15 am 

    clog, my point is he doesn’t want to show his sources because that would give away his agenda. He bitches about others and their sources then he does his madkatism. I am well aware of finding out where his extremism emanates. Lately he has been a heavy Zero Hedge user, lol. He used to call that part of ministry of propaganda or some other dumbshit label. Now he gets most of his news there.

  15. Cloggie on Sun, 14th May 2017 6:21 am 

    Autonomous cars are a product of affluence and affluence is clearly set to drop precipitously someday but at least in the near term less resources will go into what we can’t afford or don’t need.

    There is not much difference in price between a normal car and an autonomous car. It is a matter of a few sensors, software and DC motors controlling the steering wheel, brakes and clutches extra.

    An autonomous car is not a gadget (as you see it) but a revolution in car usage with enormous implications, largely positive. It is a compromise between the fine-grained transportation performance and public transport. Advantages:

    – no need for expensive mass private ownership of cars
    – no cities full with parked cars, unused 95% of the time
    – same transportation performance with far fewer cars
    – far higher occupation rate than the current standard 1.25 by application of smart algorithms, combining desired trajectories of more than one person, including changing vehicles en route, like in a train journey.

    https://www.youtube.com/watch?v=NodzOaLJENo

  16. Davy on Sun, 14th May 2017 6:41 am 

    “There is not much difference in price between a normal car and an autonomous car. It is a matter of a few sensors, software and DC motors controlling the steering wheel, brakes and clutches extra.”

    References??
    Clog, there is a big difference in price and it is called the whole establishment and the infrastructure that makes it possible that is very costly and prone to breakdown. I guarantee the cost benefits are not here. Show me a selling price. The technology is not even perfected and likely never will be except a localized application. This is just another bell and whistle of a society in extreme denial. It is something we don’t need. We can have humans drive cars and drive less. We are engineering human’s right out of life just because we like gadgets. This is a niche for a nice comfy Dutch city but nowhere like where I live and most other people live. I have enough worries with the other guy let alone worrying about a computer failure. You are pissing up a rope on this one. I like when you talk alternative tech but this one shows where you deviate into the absurd IMA an absurd society is all excited about.

  17. Dredd on Sun, 14th May 2017 7:30 am 

    When the minions of Oil-Qaeda are confronted with reality they behave badly (Oil-Qaeda: The Deadliest Parasite Of Civilization).

  18. makati1 on Sun, 14th May 2017 8:11 am 

    Davy. all you have to do is “drop” the title in any search engine to find the links. Or didn’t you know that? The headlines say it all anyway. The U$ is already 3rd world and heading fast to become the new Bangladesh.

  19. Davy on Sun, 14th May 2017 10:04 am 

    Madkat, it is something others always do. Are you better than others and can be sloppy and lazy but others can’t? Sorry, you are not being accurate and distorting facts in yet another way.

  20. GregT on Sun, 14th May 2017 1:02 pm 

    “Sorry, you are not being accurate and distorting facts in yet another way.”

    Those are all current news articles Davy, and are being reported by numerous different outlets.

  21. Davy on Sun, 14th May 2017 1:38 pm 

    No shit Sherlock. He can post the links instead of the unsupported drama. This is the kind of distorted and unsupported nature of anti-Americanism here. Since so many here are anti-American it flys by without comment. You would give boat a tongue lashing if he did it but since it is your idol, Makati it is different.

  22. GregT on Sun, 14th May 2017 3:19 pm 

    Boat spews nonsense Davy. What makati posted is not nonsense. Just because you don’t like to hear about it, does not make it any less real.

  23. Davy on Sun, 14th May 2017 3:35 pm 

    Greg, spews hipocrisy and Madkat spews emotional anti-American agenda. What a great match that is. Your attacks on boat are emotion based. Boat makes plenty of points that deserve a hearing just becuase you don’t like to hear about it does not make them any less deserving of a place in the discussion. You most of all hate boat because he is that special kind of American that makes your skin crawl.

  24. Cloggie on Sun, 14th May 2017 3:44 pm 

    “You most of all hate boat because he is that special kind of American that makes your skin crawl.”

    And every now and then he crawls your skin too.

  25. Davy on Sun, 14th May 2017 3:53 pm 

    yeap and that is why I avoid him. He gets the anti-Americans worked up then I have to listen to the anti-American gang bang sessions that are so routine and uninspiring.

  26. Anonymouse on Sun, 14th May 2017 6:34 pm 

    Those are good, contrasting pics there clogged toilet. The problem lies in the argument you attach to them, namely that so-called ‘robo-cars’ are somehow fundamentally different from the parked oil-burners in the modern pic. They wouldn’t be, if they existed. None of benefits as you describe them, would ever materialize in the fashion you continue to insist they would, even if society were foolish enough to invest in these non-existent cars and their supporting infrastructure.

    Thankfully, no one will ever put you in charge of making such decisions, so its all good.

    Clogged sewers robo-car world*, could be best characterized as the ultimate example of throwing good money after bad. Why not promote flying cars and jet packs instead? I have no doubt at all, if the interwebs existed in the 1970s, clogged-pipes here would be tirelessly promoting the imminent arrival of the flying car\jet pack world, and all the supposed benefits they would bring.

    *Im being charitable here to clogged-toilet, since it is a well known fact that robo-cars simply dont work anywhere near as well as their proponents claim. Nor do they ‘exist’ in a any meaningful sense of the word beyond a few test models here and there, whose performance and utility are questionable to say the least.

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