Oil sands: The muddied message

COMMENT: Environmentalist campaigns against tar sands exploitation appear to have fostered a growth opportunity - and the advertising industry is pouncing on it with all the tools in its arsenal. But this article suggests the tar sands producers aren't falling for it.

Nathan VanderKlippe and Katherine O'Neill
Globe and Mail
Thursday, Sep. 24, 2009

A Syncrude oil sands facility in Alberta (AFP/Getty Images)

Recent Greenpeace stunt reveals need for industry to tackle its ‘dirty oil' image problem head on, observers say

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.”

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Oil sands under attack on environment

Oil sands emissions (Nathan VanderKlippe/The Globe and Mail)

The industry is accustomed to defending its image in North America, but it now faces a multifront war, with opposition growing from Norway to Washington

The environmental battle over Alberta's oil sands is going global, forcing the industry to respond to new attacks on its record and putting fresh pressure on Ottawa.

The Calgary-based industry is accustomed to defending its image in North America, but it now faces a multifront war. That growing global opposition is highlighted by its role in today's federal election in Norway, where the state-owned oil company's plans for the oil sands have sparked controversy.

As well, a documentary that premiered in Switzerland and is now playing at the Toronto International Film Festival depicts the projects' devastating environmental impact; and a delegation of Chinese journalists is planning a visit to the scarred landscape of northeastern Alberta.

At the same time, U.S. activists are continuing their attacks in Washington, scheduling a news conference this week ahead of Prime Minister Stephen Harper's visit with President Barack Obama to highlight the dramatic increase in emissions that would occur if oil sands production is expanded as planned.

The industry expects the anti-oil sands campaigns will heighten in the runup to the international climate change conference in Copenhagen in December, which aims to replace the Kyoto Protocol with a new, binding international treaty to control emissions.

“We're not surprised that the discussion has migrated overseas to some extent, and we would expect that certainly in the lead-up to the international meeting in Copenhagen, we may see more of that,” said David Collyer, president of the Canadian Association of Petroleum Producers.

Critics are seeking to discourage foreign investment and force Canada to make more-aggressive commitments on climate change by targeting what has become a symbol of Canada's failure to cut emissions: Alberta's massive, open-pit bitumen mines.

The backlash goes beyond some adverse publicity.

Global companies such StatoilHydro ASA or Royal Dutch Shell PLC are encountering growing pressure in their home countries to revisit plans to invest in the oil sands, while Ottawa will have to table a credible climate-change plan – including real limits on oil sands emissions – or face international censure and perhaps even barriers to trade.

The industry is responding. Statoil chief executive officer Helge Lund wrote an op-ed piece in a Norwegian newspaper defending the company's role in the oil sands, while companies are themselves inviting international journalists to visit the Fort McMurray region.

Mr. Collyer expressed optimism that Canadian governments will balance environmental needs with economic development and energy security, and expects the U.S. government to take a similarly “balanced” approach. But he acknowledged there will be mounting pressure on Canada – and on the oil sands – in some international capitals.

The industry executive said oil sands represent only 5 per cent of Canadian emissions, and the country produces a mere 2 per cent of global greenhouse gases.

He said the typical oil-sands project produces 5- to 15-per-cent more carbon dioxide per barrel of oil than conventional oil supplies on a so-called “wells to wheels basis,” which calculates emissions from the production, refining and consumption of the petroleum.

Later this month, Mr. Harper will travel to Pittsburgh to attend a meeting of the Group of 20 nations, where leaders will attempt to narrow the gaping divisions between developing and developed countries, and Europe and North America, in hopes of reaching a climate treaty in Copenhagen.

Mr. Harper has insisted developing countries like China and India must accept some commitment to reduce greenhouse-gas emissions.

But Canada's credibility is undermined by its own modest targets and its failure to even come close to meeting its commitments under the Kyoto Protocol, said Andrei Marcu, a climate-change adviser with Calgary-based law firm Bennett Jones LLP.

The federal government is slated to release a revised climate-change strategy this fall that is expected to force companies to further reduce their emissions per barrel of oil produced, but not include absolute caps that would limit expansion of oil sands projects.

Environmentalists argue the oil sands represent one of the fastest-growing sources of emissions in the world.

They say that in order to protect its domestic oil industry, Canada has been a laggard in the international climate-change debate.

In a report to be released today, Greenpeace calculates total emissions from the oil sands region will triple by 2020 if proposed projects come on-stream.

Environmental writer Andrew Nikiforuk, who wrote the report, said the oils sands will have larger emissions than some mid-sized European countries, including Belgium, Ireland and Denmark.

That prospect has prompted politicians in Norway to assail Statoil for its plans to expand in the oil sands. In fact, Greenpeace has helped instigate the backlash in the Nordic country, hosting Norwegian journalists visiting northeastern Alberta, and sending a delegation, including Mr. Nikiforuk, to Oslo prior to Statoil's annual meeting in May.

In advance of today's vote, virtually every party in the country's multiparty system has said it will review the state-owned company's Canadian strategy after the election. Minister of Environment Erik Solheim is a member of the Socialist Left Party, a member of the governing coalition led by the Labour Party.

He said his party will demand new environmental laws that “will make it impossible for a company like Statoil to enter such [oil sands] projects,” he told the Norwegian daily Aftenposten.

Statoil moved aggressively into Alberta in 2007, when it paid $2.2-billion for North American Oil Sands Corp.

The company says it is committed to reducing emissions in the oil sands, including possible adoption of carbon capture and storage (CCS) technology.

Though many in the oil industry tout CCS has a key to improving its carbon footprint, the technology remains untried and prohibitively expensive without major government subsidies.

With a file by The Canadian Press

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