The Five Biggest Enemies Of Oil & Gas

The oil and gas industry used to be untouchable. It’s not anymore. Enemies have surrounded it in a pincer movement, and now, it’s all-out war.

From public sentiment to government meddling, we’ve outlined the five most ruthless adversaries the global industry faces today in a war in which it just might be its own worst enemy.

Enemy #1: The Oil and Gas Industry

Being one’s own worst enemy may sound cliché, but in this case it is particularly apt. The oil and gas industry has done a pretty good job of making itself out to be the bad guy. It has not performed its environmental duties admirably. Exxon, BP, Enbridge–all responsible for tarnishing the public perception for the industry at large. And we don’t even need to point out why. No one can forget.

We doubt if in hindsight, any of those responsible for sizeable environmental disasters would have made identical choices, but the fact remains, the environmental disasters that a handful of companies have perpetrated will likely be remembered forever. Is it even possible to rebrand?

We wouldn’t know, because the industry is doing precious little to try.

Take pipelines, for instance. Fact: pipelines are still the safest way to move oil and gas–including by rail and by truck. Is it perfect? Nope. But it sure beats any other method. So why, then, has the oil industry been unable to rise above the misinformation about pipelines? Why has the sanctimonious war cry of pipeline protestors not been answered?

And what about public perception outside of these disasters? Other industries have rallied together to promote themselves (Dairy’s “Got Milk?” campaign, Florida orange juice, for example).

Meanwhile, oil and gas companies are too busy stabbing each other in the back to notice that a flurry of other enemies are trying to cut them off at the knees.

Instead, the oil and gas industry–the very lifeblood of the world, without which we would be plunged into utter darkness–sits back, twiddles its thumbs, and waits for another round of kicking.

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Source: Marketing-Interactive

The energy industry comes in at the bottom of the pack when it comes to parting ways with its hard-earned dollars in order to self-promote.

Enemy #2: If It Weren’t For Those Meddling Kids!

Millennials are changing the world, and the oil and gas industry will be profoundly affected by this generation.

Millennials are waging a silent war against all things dirty, against all things unshareable, against all things morally reprehensible, and on all things that fail to live up to some unrealistic ideal.

This generation has the power to bring about positive change, but if you’re the oil industry, look out, because the millennials are coming for you, and the generation behind them is even more passionate about sending you to your grave.

Enemy #3: The Rise of the Electric Vehicle

We’re not talking about Teslas. No, it’s much bigger than that. Tesla is the spark, but big auto–and all their big bucks–will be the sonic boom that follows. The transportation sector in the United States accounts for 69% of all petroleum consumed in this country–and as the transportation sector goes, so goes the oil sector.

Sure, petrochemicals are a lovely consolation prize. The industry can only hope that any electric vehicle revolution is timed perfectly with an increase in petrochemical demand. And honestly, they have a bit of time before that happens. More EV infrastructure needs to be in place, range needs to be increased, and an increased variety of EVs need to be available–including SUVs and trucks.

But still, most analysts think the day of the EV will be here within the next 20 years. But the oil industry has an opportunity to slow their roll.

Decreased emissions and increased efficiency of ICE engines and aggressive SUV and heavy duty truck marketing/quality improvements are just a few things the oil industry could assist big auto with to keep its status as top dog for longer.

However, finding new ways to improve its own efficiency of pumping crude oil is probably the best longevity strategy–a strategy that will keep oil prices low, which will in turn keep gasoline prices low. And when gasoline prices are low, people buy SUVs and trucks without thinking twice.

High crude oil prices are but a short-sighted gain that will doom the industry and will usher in a new renewables/EV push and hasten the industry’s demise.

Enemy #4: Government Ineptitude

The number of governments that have worked against their own oil industry is staggering–and shameful given the industry’s potential for single-handedly financially supporting entire countries.

Typical counterproductive actions include corrupt government officials bobbling mega oil deals, enacting regulations that disincentivize foreign oil companies from taking part, pulling support of critical infrastructure required to keep the oil industry afloat, or failing to ensure safety and security to downgrade risk for oil companies wanting to do business.

Recent examples include Brazil’s failed oil auctions; Libya’s prolonged instability; Canada’s utter flop with critical pipeline projects and its impotence in decisively quashing oil-related spats between Alberta and BC; South Sudan’s stubborn refusal to agree on anything except civil war; Venezuela’s corruption, refusal to spend money to keep its industry going, the citizens’ inability or refusal to oust Maduro, and heavy borrowing from China and Russia; Mexico’s failure to recruit foreign talent to exploit its deepwater oil riches and its push to undo promising oil deals with foreign oil companies, Angola’s use of its oil industry as a personal piggy bank, Algeria’s political uncertainty–the list is so extensive that it’s impossible to complete. Still, this short version highlights sufficiently just how dangerous governments can be to their own oil and gas industries.

Enemy #5: Hollywood A-Listers

Hollywood actors and actresses have propelled climate issues into the latest cause célèbre–from anti-oil pipeline causes to anti-Exxon ones, and from the Paris Accords to clean living. Hollywood’s A-listers never miss an opportunity to get arrested for the cause, often conveniently in front of a camera. (Especially the older ones who need a career boost).

These A-listers have a following, for sure, and so some of their passion for the environment leeches over into their specific fan base. But thankfully for the oil and gas industry, these A-listers have failed for the most part to project this anti-oil agenda onto the big screen for the masses to consume.

Hollywood loves their supervillains, don’t they? But the oil industry isn’t one of them–it just doesn’t sell. The masses have already chosen their villain criteria, and are unwilling to accept anything else. Acceptable villains today are Russians, redheads, people with scars, big corporations with deep pockets, rich people, and anyone who had a rotten childhood and a solid motive to do evil. And surprisingly–but aptly as well–another villain that Hollywood seems to be in love with are radical-climate change types. Need proof? Avengers: Infinity War and Avengers: Endgame. Godzilla: King of the Monsters.

And while the deep-pocketed BP might have found itself portrayed as a victim on the big screen, it really had more to do with BP’s perceived reckless greed rather than the fact that it was an oil and gas producer.

So while Hollywood A-listers are rallying their fans, Hollywood isn’t behind them on this one, and their message is unlikely to translate to the masses. But that certainly won’t stop the A-listers from improving their own image on the back of the climate crusade.

The good news for the oil industry is that the majority of these enemies are defeatable. With increased government cooperation, a take-no-prisoners approach to changing public perception, and cleaning up its own act for starters will go a long way to sustaining the industry for years to come.

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