The start of a new year is a good time to consider new approaches to the politics of energy. As the year just ended showed, old approaches don't work. They don't work because, especially in the US, people don't like the oil and gas industry very much. In most US regions, in fact, they don't like it at all.
As a business issue, this matters less than sales of oil and gas. But chronic unpopularity matters greatly in politics. There, unpopularity hurts. And there, the industry too frequently deserves what it gets.
Antique view
The industry does little about its unpopularity. For years, to the extent anyone fretted about this ailment the antidote was always to educate the public. In service to this goal, there have been public relations efforts, school programs, and advertising campaigns. Many of them have been quite good.
But is the public by any measure educated about oil and gas? No. Outside the major oil and gas producing states, people have an antique view of industry operations that's not likely to change. So they continue to buy gasoline, diesel, heating oil, natural gas, and plastic products and to suspect the industry that delivers all this goodness of being forever at odds with their interests.
What to do?
One way to respond is to pursue popular environmental agendas, as BP PLC and Royal Dutch/Shell Group have done in Europe, or to invest heavily in environmental research, as ExxonMobil Corp. has done with global warming in the US. Those approaches beat doing nothing. The companies no doubt believe in the programs and deserve credit for adopting them. But do aggressive stances or investments in environmental causes generate enough goodwill to help the industry in important political issues? The answer is nebulous, at best.
What's clear is that the oil and gas industry is increasingly detached from its customers. As its technologies grow ever more complex, the industry becomes ever more difficult for outsiders to understand—and therefore more suspicious. And in the US, the industry has become geographically as well as intellectually isolated by concentrating itself in Houston. The detachment was sadly evident in discussions about the omnibus energy bill that failed for the second time in 2 years in November. An effective way for lawmakers to oppose provisions supported by industry groups was to point out that they would help oil and gas companies, America's perennial villains.
The US industry needs to acknowledge and act on this disconnection. It should begin by originating all of its political ambitions at its one point of direct contact with nearly everyone in the country: where hydrocarbons are consumed. People unmoved by import dependency levels and technological achievements care mightily what happens in the way of supply and price at gasoline pumps, heating oil trucks, and burner tips.
The industry's politics must pivot on the interests of oil and gas consumers. Its first question in any political issue should be about the potential effects on people who depend on its products. The central character of its political dialog should be the consumer.
This doesn't mean it should automatically oppose anything that raises the price of gasoline. It does mean that when a generally beneficial initiative, such as fuel reformulation, emerges the industry should take the lead in explaining the benefits and costs to its customers and the reasons for its support of something likely to raise prices. It likewise should vigorously explain its opposition to proposals that would raise consumer costs without promising compensatory benefits. And it should never support anything in the latter category, even as a political compromise.
Consumers' connections
It's not easy to explain the consumer benefits of, say, leasing of the Arctic National Wildlife Refuge coastal plain. Or of expensing of geological and geophysical costs. Or of relaxation of moratoriums on leasing of the Outer Continental Shelf. Or of rationalization of state and federal specifications for vehicle fuel.
Yet a new approach to energy politics demands thoughtful and clear explanations of how industry political goals relate to consumers. It's worth the effort. Following the old approach, the US industry found itself stuck last year supporting comprehensive energy legislation that would have hurt more than helped its customers. That must not happen again.