Thursday, May 26, 2011

Fracking Can't Win a PR Battle (But Can it Win the War?)

In recent weeks, I've read a handful of articles about the annual meetings of big oil and gas companies where each company is facing a shareholder proposal calling for greater transparency in the process of hydraulic fracturing.  Not only are the proposals calling for specific disclosure, they are are also asking companies to reveal potential risks to the company's future production.  It is a new strategy by anti-fracking folks to spook investors as a way of influencing public opinion.

The referendums have largely failed, but their presence on the ballot has attracted lots of attention and has even led to a few investor proxy advisory companies to come out in favor of the resolutions.  It's a very shrewd way of infiltrating the media subconscious, something that the energy industry has thus far failed to do with any success.

While I've always thought greater transparency is necessary (see how fast the "birther" movement died once Obama released his long form birth certificate?), the shareholder votes are maneuvers designed to embarrass companies and plant the seeds of doubt about hydraulic fracturing.  Nobody is going to embarrass Exxon and CEO Rex Tillerson, but Exxon is not a sympathetic character and it is not likely to be very successful in swaying public opinion, no matter how many slick and soothing commercials it plays at prime time.

The shareholder put the companies in a position to instruct investors to vote against the measures, which makes them look cranky and recalcitrant, something that erodes their credibility to everyday folks. It makes them look like they've got something to hide.  The fact is that companies hate shareholder-generated proposals more than they hate excess government regulation.  If companies had their way, there wouldn't even be an annual meeting. It's not just Exxon - all companies that feel that way.

But It's not that the energy industry has been sitting on its hands.  The problem is that the companies and their trade groups have very little credibility in talking to the desired audience.  They can run thousands of commercials on CNN and FOX to scare people stupid about energy independence and tout our abundant domestic resources, but the people influenced by these commercials are not the same people breathlessly complaining about fracking.  It's preaching to the choir.

I wish I had the golden solution, but there are two no-brainers:
  1. Be more transparent and disclose more information.  Don't look like you are trying to hide something.  
  2. Work day and night to develop new fluid formulas that don't contain scary chemicals.  Nobody is going to see a "known carcinogen" on a list of chemicals - even if it is only 0.0001% of the formula - and say, "OK, cool."  
A bigger, slicker PR campaign will not win the day.  Put that money into better chemistry.  All hands on deck!  If the energy industry doesn't come forth with a better model - fully disclosed - the opponents will lead the conversation and always have the upper hand.  Much like a birth certificate killed the "birthers," disclosure and an improved product will pull hydraulic fracturing out of the ditch.

I don't see the energy industry winning the PR battle, but it doesn't mean it can't win the war.

1 comment:

Anonymous said...

Why was my comment regarding frac chemicals deleted? Was it because I included the link to the birth certificate truths?