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Ohio Report on Earthquakes Hits Shale Gas Industry

For some time, the burgeoning Ohio oil and gas industry has enjoyed a largely positive public perception. On Friday, regulators in Columbus issued an announcement that created a mounting communications crisis and could alter public support.

The Ohio Department of Natural Resources (ODNR) said it had found a “probable connection” between the drilling activity or “fracking” of Hilcorp Energy Co. and a series of earthquakes that occurred in Mahoning County’s Poland Township in March.

ODNR halted drilling within a three-mile radius of the epicenter of the quakes. Regulators said firms active in the Utica Shale formation, which runs under Ohio, Pennsylvania and West Virginia, must install seismic monitors if they drill within three miles of a known fault. They also must suspend operations if they detect seismic activity greater than a magnitude of 1.0.

The Ohio Oil & Gas Association responded by saying it would review ODNR’s findings and support measures based on sound, scientific principles.

The coverage was widespread, nearly immediate and definitive. Here are a few of the headlines:

The Wall Street Journal, “Ohio Geologists Link Fracking With Earthquakes

EnergyWire, “Ohio makes strongest link yet between shaking and fracking

The Los Angeles Times, “Ohio finds link between fracking and sudden burst of earthquakes

State regulators all over the United States will likely study the implications of ODNR’s actions. Officials in Oklahoma, Ohio, Kansas, and Texas already are discussing how to strengthen fracking standards because of seismic activity.

Even before the announcement, the sector was under the spotlight. During a year when the industry said it would drill 1,000 wells in Ohio, some local governments are considering drilling bans, a group in Youngstown has placed a drilling ban on the ballot for the third time, Ohio officials recently passed strict air standards to prevent methane leaks and state lawmakers are considering an elevated severance tax.

The oil and gas sector is one of the most dynamic contributors to Ohio’s economy. Billions of dollars are being invested, with one estimate placing investment and economic impact at $19 billion and growing. Workers are flowing into Ohio, triggering a hotel construction boom and a shortage of office space.

One of the few unpredictable factors that could hinder this momentum is poor public perception. In February, I wrote about the industry’s concern and the need for improved communications.

Now, Ohio regulators have introduced a more urgent element into the public debate. Whether your company’s communications style can be described as “proactive” or “reactive,” our experience tells us to consider the following questions to help you evaluate your communications strategy:

  1. Do you consistently and prominently reinforce your commitment to public safetyIt is difficult to win the public’s trust if residents believe you are making the ground shake. A commitment to public safety and the safety of your workers needs to be stated prominently and frequently. This is particularly true when communicating to new hires in communities where you have active operations.
  2. Do you effectively explain the precautions you take when drilling, capturing and disposing of wastewater, laying pipe, etc.? This is more than citing your safety record, although that is certainly important. Too few organizations post videos, infographics and other tools on their website to explain the steps they take to meet regulations, protect the public and maintain the environment.
  3. Are the top executives of your organization effective at connecting with the communities where you have operations? I’ve seen a number of presentations by oil and gas executives visiting Ohio from Texas, Oklahoma and Colorado. Some clearly are invested in connecting with Ohioans and their communities. Others appear uncomfortable or distant.
  4. Does your communications staff have effective relationships with influential media? This includes a broad range, from national, trade and local media to prominent bloggers and pure digital media. Relationships based on credibility are critical when communicating with the media. After the ODNR announcement, news was posted on websites and social media within minutes. It is difficult to match that speed with accurate information when you don’t know the reporter and his/her email or phone number.
  5. Does your organization utilize and monitor social media? In addition to your website, social media such as Twitter, Facebook and LinkedIn are excellent ways to communicate with and engage important community audiences. Then when you wish to make a public point, rebut an error in fact that is being bandied about social media, or even publish a top executive’s latest speech, distribution is only a tweet or post away.

The billions of dollars the oil and gas industry is investing is proof of the potential in the Utica as well as in shale formations across the country. In question is whether public perception will dampen future investment, impacting the U.S. industry.

If you have any questions or comments on these issues, please leave them in the comments section below, or feel free to send an email or give me a call. We are always glad to share our thoughts and hear the views of others as we all learn together. I can be reached at dhertz@dix-eaton.com or 216.241.2145.

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