Tuesday, October 16, 2007

Alberta's Oil and Gas Industry Has Some Public Perception Problems

There has been some mention in comments on this Blog that want to compare the energy industry and the forest sector in Alberta. We did a survey in 2005 of almost 3000 Albertans on behalf of the forest industry looking into what they needed to do to enhance their social licence to operate.

Forest v. Oil and Gas
Comparison of two important Alberta industries:
Percentage ranking of Excellent and Very Good Performance:

The first number is the forest industry, followed by the oil and gas sector:

Concern with long term sustainability of resources: 83.7 vs. 63.1
Demonstrates environmental planning and mtg: 80.0 vs. 63.9
Gets attention/support of government: 77.3 vs. 88.9
Supports research and applies technology: 80.5 vs. 87.3
Is accountable on how it uses forest lands: 69.7 vs. 51.2
Coordinates with other sectors, communities and users 62.0 vs. 54.9
Is aware and respects needs of forest wildlife 61.7 vs. 47.2

Part of the work we did was a comparison of Albertans impressions of the performance of the two industry sectors on some key criteria on responsible and sustainable business practices.

You can see from the table there is a statistically significant difference between the two industries in every aspect under review. The most significant perceptions about the conventional energy sector was the low ranking in awareness and respect of wildlife habitat, which was found to be one of the most significant value drivers for Albertans in the use of their forests.

The low level of the energy sector’s accountability in how it uses the forest is telling as well, especially when it is a fact that the oil and gas sector cuts down more Alberta trees each year than the entire Alberta forest industry.

On the other hand, the perceptions amongst Albertans are that the energy sector get much more attention and support form government than the forest industry. Given the differences in relative size and economic significance this is hardly a surprise. One positive perception comparison for the energy sector is its use of research and technology.

The key finding is that the forest industry is perceived as an overwhelmingly better resource steward than the energy sector. This perception is not becoming reality as some of the energy sector players have tried to scare and intimidate government and suppliers over the “Our Fair Share” Royalty Review.

A recent poll is showing 88% of Albertans think royalties in the energy sector should be higher. Our findings of 2 years ago illustrated the poor perceptions Albertans’ have of the energy sector’s resource management and stewardship responsibilities.

The new focused political pressures from the royalty review and the Auditor General, and the crystallizing impact they have had on engaging citizens, the energy sector may want to revisit its strategy about threatening to pull out investment that will only punish suppliers and local communities.