When billions of dollars are invested in a volatile boom-bust sector such as oil and gas, a few things tend to occur. First, aggressive businesses rush to secure the appropriate leverage they need to benefit from the expected “boom.” Second, in the crush of activity, rumor and misinformation spread as easily as fact.
At the recent Crain’s Cleveland Business Shale Summit, speakers and participants extolled the level of activity in the Utica and Marcellus Shale formations. The industry expects to drill 1,000 wells this year and a like amount in 2015. That is an extraordinary amount of activity for a relatively young shale formation whose total wells only recently crested 1,000.
However, several speakers and participants also expressed frustration at their inability to address an urgent underlying concern: the public’s growing suspicions of the industry’s economic benefits and best practices.
In his keynote speech, G. Allen Brooks, an industry analyst and publisher of “Musings from the Oil Patch” said the Utica has a great deal of potential, but there is no guarantee that it will be fully tapped for both economic and public opinion reasons. “A lot of debate generated by shale is emotional. It is not necessarily factual.”
Other speakers predicted that even under the most careful conditions, an eventual crisis stemming from an industry mistake, spill or accident will occur. The question in their minds was not if, but when.
It is clear that as activity ramps up in the Utica Shale, the need to address the public’s understanding of the oil and gas industry is increasing. The industry will need to reframe the public conversation from investment and activity to themes that also stress environmental responsibility and community connectivity.
David Hill, a geologist and incoming president of the Ohio Oil and Gas Institute, did as much while sitting on a panel aptly named, “Environment or Energy – Must We Choose?” Hill said the industry needs to reassure the public of its intentions to be safe and responsible. “Ohio has benefited from the problems in other states,” he said, referring specifically to environmental and regulatory issues in Pennsylvania. “Ohio is getting it right.”
Part of the industry’s challenge is the environmental conversation is shifting. For instance, in addition to water use and ground water contamination concerns, the public conversation includes air quality concerns arising from potential methane leaks in pipelines and well pads. Such leaks would contribute to the atmosphere’s methane levels and greenhouse gas problems.
It is clear that the industry will need to cope with this shifting landscape if it wants to continue to build strong community relationships across Ohio.
Consider the outcome if communications do not improve and the shale debate remains “emotional” rather than “factual.”
- As the industry seeks to ramp up the drilling rate to 1,000 wells a year, misunderstanding and eventual opposition will increase, slowing investment and hindering development.
- When the inevitable accident does occur, the industry will be playing from behind, making it more difficult to communicate the sector’s track record of safety.
- Community connections will suffer, hindering cooperation and long-term public-private relationships.
Former Chesapeake CEO Aubrey McClendon, now head of American Energy Partners, once said the Utica Shale is the biggest thing to hit Ohio since the plow. That may be. But without an improved strategic communications effort within the industry, even those within the oil and gas sector understand that plow’s blade is going to be dulled considerably.