Category Archives: oil industry

When good news is really, really bad news for reputations–ExxonMobil's profits

Usually when a company posts a great big honking profit it is pretty good news all the way around. Corporate profits are what get investors jazzed up and help the market. Helping the market go up is good news for most Americans–and for others around the world as the recent weakness once again demonstrates.

But it is not good news when an oil company does it–and particularly when all oil companies do it. It makes me shudder to think how the politicians will deal with this–and that was before I read Sen. Schumer’s sarcastic and totally populist remarks in this Bulldog report.

ExxonMobil is one of the most efficient, organized, impressively managed organizations in the world. The oil industry is without question the most scrutinized and investigated industry when it comes to compliance on all fronts–environmental, safety and anti-trust. There are continual investigations going on relating to price-fixing–and all come to the same conclusion. No evidence exists–(except for a few rare and largely inconsequential stupidities by lower level managers). Prices are set by the market. Oil prices are determined by supply and demand–supply is tight, demand is escalating.

But ExxonMobil does have some responsibility for the quagmire the oil industry is in being the least respected, least trusted of all industries. Even slightly worse than (gasp!) the media itself. It bears responsibility because as the giant in the industry it not only failed to lead in addressing the huge shortfall in public understanding of the industry, its benefits, its relatively modest ROI compared to other industries, etc., but it also stood in the way of the effort of other leaders to address this. Now it is not only ExxonMobil that is suffering from the most massive license to operate challenge, it is the entire industry. And if they don’t address it and address it fast, it is going to hurt all of us.

The loss of public confidence in an industry as important as this industry could be devastating. More oversight, more regulations, greatly increased cost of doing business, increased sending of our plants and facilities overseas, etc., etc. The strategic important to our country is immense, as is the economic impact of this wildly out of balance public perception.  The crisis was on us already–and then we get these profit reports.

What happens when oil spill responders mix it up with the media?

That’s what Tod Lyons, with ACT Environmental, and I wanted to find out. I’m at the Clean Gulf Conference in Tampa and just finished the workshop that Tod and I lead called “Working with the Media in an Emergency Response.” Well, if you want to know how to work with the media effectively, how about asking them? So the four hour workshop was structured with three members of the media present to actively engage with the workshop participants on how they would do their job. We presented a complex oil spill scenario and talked though each phase of the incident to understand what the media would be looking for and how to best respond.

The media were represented by Joey West of Bay9 television in Tampa, John Sepulvado of NPR and WUSF, and Tommy Duncan, representing blog media who blogs in Tampa with www.sticksoffire.com. Also on the panel was Chief Warrant Officer Adam Wine who is the chief spokesperson for the Coast Guard in the Texas region. Adam did a great job of explaining the Joint Information Center and giving some hints as to why the Coast Guard has earned a great reputation for fast, open communication.

It was a lively discussion and I don’t have time to recap all the nuances. But here are a few of my impressions.

It is important not to put all media in the same category or brush them with too broad a brush as I am apt to do. There are major differences, and the differences between NPR as public media without any real concern about pursuing ratings and commercial broadcasters or print who need to work hard to attract the biggest audiences possible was vividly on display. It was fascinating to see on display how broadcasters–public and not–and bloggers would approach the same story in very different ways.

A major point of discussion was about relationships. Is it possible and even a good idea to establish relationships (even friendships) with members of the media if you represent a company or a government agency? Absolutely. That was very clear. It was surprising how much of the discussion came down to discussing the value of building a relationship of trust in advance of any major story. At the same time, the necessary distance and independence was also discussed. It comes down to, as Tod commented, “trust and verify.”

I also found the discussion about how much the public–particularly the younger public–distrusts companies and government very interesting. While there was some discussion about whether this was actually distrust or more a healthy skepticism, it became clear to me that there is a very fine line. When asked if the company provided detailed information about the toxic nature of substances released to the environment would the reporters trust that info, the answer was, only if it was verified by someone else I trust.

Obviously there was a lot more discussed and I think there is general agreement that the task of getting information out to the public to meet the incredible demands of instant information is daunting. But, this kind of session I think is very helpful to understand that we are all just people trying to do the very best job we can. Thanks to all who participated.

OK, Tommy, now let’s see what you have to say about this session.

Good news for the oil industry–some honest discussion

The New York Times article this weekend on refinery problems will probably not change any minds about what is happening in the oil industry. Those, like the junior senator from Washington State, who are convinced that it is all a big conspiracy and that refinery problems are just one more way the three-piece suited slobs in smoke filled rooms have figured out how to gouge us all, will see in this confirmation of their views. Others will see glimmers of hope that the real issues of no new refineries, billions spent on environmental regulations, burden-some boutique fuel requirements, etc., are emerging and will become part of the national debate about the price of fuel.

What is most bothersome to me about this important issue of fuel prices, fuel supplies and energy policy is how one-sided the debate is. Most seem to believe that anyone with any ties to big oil has no right to speak because clearly all they care about is obscene profits. Meanwhile, those ignorant of the situation along with the populists looking to boost activist or political careers, have the field of public debate to themselves. So we have a national debate going on with only one perspective being heard. Sure, the media has a role to play in this (which is why the balance in this NYT report is so welcome), but more important, the industry has a role to play. They have sat on the sidelines and kept quiet for far too long. Yes, I know it is because a CEO of the Giant wanted it that way, but he was wrong and he is gone. Time to speak up, loud, long, sustainably. The national debate about our energy future is too important to muzzle anyone–even if the muzzling is self-inflicted.