CHIEF EDITOR – OGFJ
“Many of these young professionals have
found positions in other fields that aren’t
as vulnerable to commodity price cycles.
They have moved on with their lives and
won’t be returning to their old roles when
the industry transitions into an up cycle
again. This is especially unfortunate for
the industry because it comes at a time
when baby-boomers are starting to retire
in large numbers.”
Changing public perception
CONSULTING FIRM EY recently took a nationwide survey of US consumers and another
of energy executives and found that their views
about the oil and gas industry differed dramatically. As you might expect, the executives’ response was positive. However, US consumers,
especially the younger generations, expressed
largely negative reactions to questions about
the fossil fuel industry and its future.
Although consumers agree on the importance of oil and gas to the US economy and to creating jobs, fewer
than half of the consumers polled trust the industry or say they
would welcome it to their community. In addition, a majority
(53%) of consumers believe the industry causes more problems
than it solves.
“The energy industry is providing products the public de-
mands,” said Deborah Byers, US Energy Leader for EY. “But clearly,
The report shows that industry lead-
ers and consumers don’t always see eye
to eye, but there are some areas of agree-
ment. When asked whether oil and gas
should or should not be the primary
sources of energy in our lives or if oil and
gas should be the primary sources of energy in our lives until
cleaner fuels can replace them, both industry executives (78%)
and consumers (58%) agreed oil and gas should be the primary
sources of energy until clean fuels can replace them.
Interestingly, the survey showed that 75% of industry executives believe the industry does a poor job communicating with
the public. In fact, when presented with the survey findings, the
executives acknowledge the negative findings are the result of
poor – or absent – communication.
Teens and younger adults specifically expressed feelings of
being overlooked by the industry. In general, the younger the
respondent, the less they agreed with the statement “Oil and gas
is good for society.” Only 3% of millennials see oil and gas as good
Is this a perception problem or is there something else going
On May 10, EY hosted a lunch meeting with reporters in
Houston to discuss the survey findings. The EY executives present
suggested that the problem was one of knowledge, or education.
If the public knew what the executives do, they would realize
that it is impossible to make such a rapid transition from hydro-
carbons to renewable energy.
“They don’t have as many of the facts,” said John Hartung, a
US strategy principal with EY. “The executives have run the
numbers, and the younger generations have not.”
This is correct, of course. Barring some amazing unforeseen
technology breakthrough, we simply cannot break away from
hydrocarbons in the next few decades. However, rapid strides
are being made, especially in the field of power generation, as we
transition away from coal towards cleaner fuels, which of course
includes natural gas.
Environmental concerns are not the only issue for the younger
generations of energy consumers, however. We would be selling
them short if we think this is their only problem the petroleum
industry. As a parent of two millennials, I know they are intelligent
enough to look at the total picture. They have observed the cyclical nature of the oil and gas industry as some of their friends have
pursued careers in the industry only to be cast aside ( first in, first
out) during a downturn. Many of these young professionals –
Another reason young people have a
dim view of the oil and gas industry is that they see that compensation is not always based on performance, especially in the
executive ranks. It’s not uncommon for CEOs and other top executives to actually see their pay increase during a downturn
when the company is not profitable.
Consumers and company stakeholders aren’t blind to this.
Investors recently rejected a compensation plan for ConocoPhillips’ top executives, signaling disapproval of the company’s pay
levels last year. A spokesman for the company expressed his
disappointment that the proposal didn’t pass and said the company planned to engage with their shareholders to better understand their views regarding the executive pay packages.
EY is correct in saying that the industry needs to do a better
job of informing the public about the importance of oil and gas.
The consultants are also right when they suggest the need to find
common ground that oil and gas companies can build upon to
increase consumer acceptance and appreciation for what they
provide. However, we should also consider that some of the divide
between the public and the industry is not just a PR problem – it’s
a real problem that the companies need to address.