Occasionally I will take a current issue and analyze it from a stakeholder relations perspective.
Let’s take a look at the three recent attempts to blow up EnCana pipelines near Dawson Creek in northeastern B.C. The attacks are believed linked to a letter sent to the Dawson Creek Daily News warning the energy industry to leave the area near Dawson Creek, and stop the expansion of “deadly gas wells.” The facilities attacked were all involved in the production of “sour” natural gas that contains toxic hydrogen sulfide. The third and latest attempt was on October 31.
The bombings highlight a rift between a profitable industry and locals who say their land is being despoiled and their concerns ignored.
At the heart of the conflict is the reality that in British Columbia, as in the rest of Canada, landowners do not own subsurface rights to minerals, oil or gas beneath their property. The split betwen what’s under and above ground typically doesn’t matter much to those who live in towns and cities. But it can become the stuff of nightmares for those in rural areas. In the Peace River district, landowners have watched with alarm as wells popped up in pastures and piplines crisscrossed the region like spider webs.
– Globe and Mail, Saturday Oct 25, 2008
EnCana is Canada’s largest energy company by market value, and the largest owner of oil and gas rights in Alberta. It has been touted as, depending on the day, as the most valuable public company in Canada.
The bombings threaten to destabilize EnCana’s operations, as well as those of other oil and gas companies in the area, impact their bottom lines, and most importantly, they pose a serious health and safety risk to their employees, contract workers and nearby residents. Their goal is to minimize the risk of future attacks, which is a challenge when they don’t know who is behind them.
What would your advice be from a communications perspective if you were brought in to advise EnCana executives?
Over the short term, they are cooperating with the RCMP anti-terrorism unit brought in to help solve the case. While local officials are supportive of EnCana, local residents are becoming increasingly upset and concerned for their own safety. So far, EnCana has said the public is not at risk and they have issued a general statement outlining their position. They may very will be right.
The company says its sour gas pipelines are equipped with automatic emergency shutdown valves that would “shut in,” or contain, an affected part of a pipeline if a change in pressure – from, for example, a rupture resulting from an explosion – were detected. EnCana acknowledges that there are residents in the area, but claim that none live close enough to be included in their emergency response plan.
According to Risk Communications expert Peter Sandman, the risks that kill people and the risks that upset, anger or frighten people are completely different. He calls the risks that kill people – how bad it is, how often it happens – the hazard. He calls the things that get people upset, the outrage. Sandman advocates that Risk = Hazard + Outrage. If you want to reduce risk, real or perceived, Sandman says, you must address hazard AND outrage.
What could Encana do short term to reduce outrage?
- Acknowledge nearby resident’s fears and concerns; show compassion; listen;
- Be upfront and realistic about any risks involved with their operations;
- Host a community open house;
- Invite comments from local residents on their Emergency Response Plans; and
- Set up a Community Advisory Panel.
However, the issue doesn’t rest exclusively with EnCana. Over the long term this is also an opportunity for the Canadian Association of Petroleum Producers (CAPP) to demonstrate significant leadership. The 140 member companies produce more than 95% of Canada’s natural gas and crude oil. CAPP has a stewardship program in place and companies can participate at the bronze, silver, gold or platinum levels. At the bronze level, companies must demonstrate a commitment to stewardship and report mandatory benchmarking data. Companies at the platinum level undergo external audits at least every five years. A much larger percentage of their companies should be at that level.
Ultimately I think the industry should aim for broad consensus that the benefits from their industry outweigh the risks. To do that they will need to earn the trust of company employees, activist stakeholder groups, government regulators, customers, as well as landowners and others in communities where they operate.
Consider the explosions a wakeup call. It’s fortunate no one has been injured or killed. Industry can use this as an opportunity to begin to address the underlying sources of concerns.
And now it’s over to you – What are your thoughts? What would you advise EnCana, or the oil and gas industry in general?
Photo credit: John Lehmann/Globe and Mail