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Alberta Energy Industry’s “Jekyll & Hyde” Reputation a Growing Burden

Posted November 1st, 2011 in Alberta Energy, News and tagged by admin

“Glass, china and reputation are easily cracked, and never well mended.”

– Benjamin Franklin


Reputation is very much like a shadow cast on the sidewalk.  It’s a reflection – sometimes distorted and sometimes not – of what we are and do.  And reputations matter.  No matter if you are an individual, government or corporation, a reputation can ease or constrain your ability to act.


Consider the case of the energy industry, and its increasingly “split personality” in the public’s mind.


Ask Albertans what they think of it, and there are elements that reflect an outstanding reputation: most people will talk about jobs, the economy, provincial revenues or even their own personal financial situation.


But for a growing proportion of Albertans, mentioning the energy industry conjures up far less positive images, and most focus around the environment.


Let’s start with Dr. Jekyll.


According to a ThinkHQ Public Affairs survey of a representative sample of 1000 Albertans in late September, an overwhelming proportion of the province draws both pride and profit from the energy industry.  Over 8-in-10 (81%) agree that they are “proud of Alberta’s energy resources”, and similarly high levels note a more personal and tangible attachment to the industry – 73% agree with the statement “If it weren’t for Alberta’s energy sector, I wouldn’t enjoy the quality of life I do today”.


These underlying attitudes manifest themselves in glowing endorsements of the energy industry’s contribution to the economic health of Alberta.  Over 8-in-10 (82%) say the energy sector contributes “a great deal” vs. only 5% who feel it contributes “very little”.


Interestingly, our survey respondents rate the contribution of the oilsands ahead of other components of the industry – 81% say oilsands “contribute greatly” vs pipelines (78%), conventional oil (77%), natural gas (74%), electricity (60%) and coal (48%).


This ascendency of oilsands in the minds of Albertans is very much in keeping the sector’s growth in reality, both in terms of production and royalties.


And now Mr. Hyde.  If Albertans love what the energy industry does for our provincial wallet and job market, they are far more divided when it comes to the impact on the provincial environment.


Only 44% of Albertans believe that the energy industry uses “very environmentally responsible” practices, compared to a quarter (25%) who maintain it is “not at all environmentally responsible”.


The results are even worse for oilsands.  It may lead the pack in terms of economic contribution, but it is at the bottom in terms of perceived environmental responsibility – roughly equal proportions rate oilsands production as very environmentally responsible (39%) and completely irresponsible (36%).  It’s on par with views about coal.


This is an important finding, as “environmental responsibility” is becoming an increasingly more important component of the overall reputation of the energy sector itself. And more to the point, when asked to weigh the prominence of jobs and economic growth vs. the environment, and a modest plurality of Albertans (47%) choose the environment.


Even more problematic for the energy industry is the growing sense that at they are more concerned about profits than environmental responsibility.  Indeed, when presented with the attitudinal statement, “The Energy industry in Alberta doesn’t care about the environment, they only care about making money”, survey respondents are split down the middle: 47% agree with that view, while 47% disagree.


This represents a seismic shift in attitudes.  Only a decade ago, Albertans overwhelmingly gave industry the benefit of the doubt on the environment.  In January 2000, two-thirds (64%) of Albertans disagreed that industry valued “profits over planet” so to speak.


What’s changed?  Simply put, the growth of the oilsands are the “game changer” here.  Development of this resource has come under unprecedented environmental scrutiny and criticism, and whether one feels it is justified or not, it has unquestionably impacted the reputation of Alberta’s energy industry.


The implications of this are far-reaching as it defines the degree of tolerance or demand for public policy toward energy.


Take for instance, public support for more federal government involvement in the environmental regulation of oilsands development.


When asked, over four-in-ten (41%) of Albertans say they would welcome more federal regulatory involvement vs. 47% opposed.  For a province whose political culture has been forged by constitutional battles waged over natural resources, this is a surprisingly even split.


But even broader than that, Alberta is not an island – We are a province whose economic success depends upon our ability to trade and transport our energy resources.  And it’s becoming more difficult.  Alberta’s energy industry is increasingly occupying notorious space on newspaper front pages around the globe.


It’s not difficult to imagine the impact a negative environmental reputation might have in parts of the world where the positive reach of the energy industry’s reputation aren’t directly manifest in jobs or one’s personal financial situation.  Places like say, Nebraska, the European Union or even northern British Columbia.


One wonders if XL Pipeline would be a heated issue finding its way to President Obama’s desk if it was carrying natural gas or even conventional oil?  Perceptions of Alberta’s oilsands, and in a growing sense, its energy industry overall are framing this public policy debate.  It’s now up to industry to decide if they wish to allow the current trajectory of their reputation on the environment to continue.


The bottom line is that reputation does matter, and one of the most significant challenges Alberta’s energy industry faces in the coming years is managing its own reputation around the globe, and here at home.  That will not be a simple, quick or inexpensive task, as it involves not only what the industry does, but also the shadow those actions cast.


Marc Henry is president of ThinkHQ Public Affairs Inc., an Alberta-based public and government relations and opinion research firm.