Market News

 September 25, 2009
Oil sands: The muddied message

 Alberta's former energy minister warned the oil sands industry to "wake up" and start fighting an aggressive public relations battle, telling producers they should be embarrassed that 25 protesters were able to sneak into and temporarily shut down a major mine last week.

In a passionate call for the oil patch to more fiercely fight the public image battle it is waging -- and, by some accounts, losing -- Pat Nelson called a Greenpeace stunt a moment of shame in an address to the Oil Sands Trade Show and Conference in Edmonton Wednesday.

"Wake up, people! It's no wonder what we are getting [out are] the wrong messages," said Ms. Nelson, who left office in 2004 and is now the vice-chairman of an industry group called the In Situ Oil Sands Alliance. "Every other country in the world would have stopped them at the gates, even if it meant using force. What a message to send."

For an industry that has faced a growing line of opponents, the Greenpeace stunt reveals a dire need for a concerted campaign to tackle its "dirty oil" image problem head on, observers say.

The protest serves as evidence that efforts to counter the environmentalist message have been far too passive, Ms. Nelson said, showing conference-goers images of a huge "Tar Sands: Climate Crime" banner that Greenpeace unfurled inside the Albian Sands mine, owned by Royal Dutch Shell. The protest succeeded in closing down the mine north of Fort McMurray, Alta., for several hours.

Pictures of that banner were sent across the world. For industry to undo the damage they have done, it needs to show the public "the real pictures of the oil sands," she said.

It is an argument that strikes at the heart of the oil patch's response to its growing chorus of critics. Rather than strike back with a broad-based marketing campaign, aimed at putting its message before large swaths of the public, the industry has relied instead on websites and conversations with smaller audiences. Its rationale has been that it can be more influential by making a stronger connection with fewer people.

Marketers, however, say that's a mistake. By failing to push back more aggressively, they say, the campaign against oil sands is going largely unchallenged. In part, that may be because the oil industry simply has not been wired to fight back in public, said Russell Stedman, the managing director at the Calgary office of ad firm Taxi Canada Inc.

"Most of these companies have been successful in spite of their marketing," he said.

But, he said, an effective response may require that those attitudes change. "[Better marketing is] going to have to play a role," Mr. Stedman said.

The industry could highlight some progress it's made in reducing emissions, oil extraction technologies that step more lightly on the boreal forest, and ongoing efforts to reclaim exploited lands. Critics, of course, say an image overhaul is impossible because the industry is inherently environmentally destructive.

Industry has done some mass marketing -- including ads in several smaller U.S. publications such as the Washington Times, and The Hill, last week.

But rather than spend on big-budget advertising, companies have instead worked to stir up a "conversation" on oil sands. The Canadian Association of Petroleum Producers launched a Twitter feed this summer, and spends the bulk of its advertising budget on Google ad buys, which for $10,000 a month have delivered 10,000 monthly hits to its website. It has worked to build up canadasoilsands.ca, where it lays out industry positions on issues like water use and emissions. And it has tendered favoured numbers-heavy slideshow presentations to get its message out.

But the volume of that response appears to be outmatched by critics, who have taken out ads in some of the biggest U.S. newspapers, launched a satirical oil sands travel website (inviting guests to mornings that start with a "propane cannon wake-up call") and greeted both travelling senators and President Barack Obama with published anti-tar sands messages.

Industry itself admits it has been slow to respond.

"We have to a large degree neglected the broader NGO communities, and some of the concerns that have related to our operations," said Janet Annesley, Shell's senior manager of external relations. "We do know we need to do better. That's the bottom line. Industry has been on the back foot."

Damaged reputations aren't the only danger of unchallenged criticism. Public opposition could also hurt the "social licence" of oil sands companies to operate, and potentially affect policy.

But industry hasn't yet seen evidence of that -- U.S. leaders, in fact, have made recent statements supporting oil sands in the name of energy security. And the oil patch believes firing back with a mass market salvo won't work. For one, there's the question of whether anyone would actually believe them. "We don't have the credibility to tell our story in a one-way medium," said CAPP spokesman Travis Davies, who acknowledges the PR battle will likely become more strident in the months ahead of the Copenhagen climate talks in December.

Still, rather than fight fire with fire, he believes industry first needs to build a base of believable supporters.

"We need to build some advocates on both the media side and the public side that will engage us in a bigger conversation, and then maybe we'll have some legs to stand on in terms of traditional messaging," he said. "But until we do that, we just don't have the luxury of sloganeering."

Calgary and Edmonton --- Globe and Mail