Energy
HIGH STAKES
THIS ISSUE: ENERGY
The energy industry stands at a crossroads. The global warming debate is all but decided. Another summer of surging prices is likely on the horizon. Action in Washington on myriad energy issues seems like a forgone conclusion.
Whether it’s oil and gas companies, renewable technologies, nuclear power, or non-nuclear utilities that are in the spotlight, how the energy industry communicates with key stakeholders this summer will significantly affect its future.
In this issue, we outline the foremost communications challenges facing the four pillars of the energy industry…Gain insight from Baruch Fischhoff of Carnegie Mellon University on how the nuclear power industry can best make its case…examine the blogs covering energy issues…And look ahead to how the green movement will result in increased legal liability.
Strategies: A high-stakes summer
While oil and gas companies, renewable technologies, nuclear power, and non-nuclear utilities each have a significant role to play in our energy future, the size and scope of their roles will largely be determined by how they respond to diverse and immediate communications challenges. In order to seize the opportunities ahead, as well as limit the reputational liabilities, the economic, environmental, and national security concerns of diverse stakeholders must be carefully addressed.
Here are the central communications challenges facing each of the four pillars of the energy industry during this high-stakes summer:
Oil and gas companies. For oil and gas companies, the time has come to be seen not as an oil and gas company, but as an energy company. That means moving beyond hydrocarbons and the debate over global warming, which, for all intents and purposes, is over (even if questions of science still loom). By publicizing a longer-term view of how their business models will change to reflect the growing environmental and economic concerns of their stakeholders – rather than trying to minimize environmental impacts or defend massive profits – oil and gas companies can demonstrate that they are part of the solution, not the problem.
Renewable technologies. For the last three decades, renewable technologies such as wind, solar, and bio-fuels have been caught in a cycle: They're wildly popular when oil prices are up and little more than afterthoughts when oil prices are down. Companies that generate renewable energy need to demonstrate why they represent more than just a short-term, economic solution. That means addressing amplified stakeholder concerns when oil prices drop – concerns that range from ethanol’s effect on food prices to the dangers that wind farms pose for wildlife. And, it means finally articulating how renewable solutions can be viably implemented on a large-scale basis.
Nuclear power. For the first time since Three Mile Island, real growth in nuclear power is back on the table as a viable option. But the industry must still address the emotionally-based security concerns of its audience. Fact: It is far safer to live next to a nuclear power plant than a coal-burning plant. Fact: People who lives next to nuclear power plants still don't know that. As such, nuclear power has a big perception problem that won’t be solved by 1950s-style “Your Friend the Atom" campaigns. Nuclear utilities need to address concerns over waste and plant security in ways that appeal to the emotional – rather than intellectual – needs of its audience.
Non-nuclear utilities. Non-nuclear utilities - or coal, for lack of a better word - have a tremendous advantage. They are the incumbent. The vast majority of kilowatt hours are generated by coal-burning plants, and that seems unlikely to change anytime soon. That said, coal companies and coal-burning utilities cannot afford to be complacent. Industry insiders can look at innovative tactics such as carbon capture and sequestration and coal-to-liquid technologies and aver that coal achieves all of that. But there aren’t may people that can tell you what those terms even mean, much less how they address the environmental and economic concerns of ratepayers. Words matter in the energy debate. If your audience doesn’t understand the ones you’re using, you’re wasting your breath.
Industry insight: Baruch Fischhoff, Howard Heinz University Professor, Carnegie Mellon University
Baruch Fischhoff is the Howard Heinz University Professor at Carnegie Mellon University. He is a member of the Institute of Medicine of the National Academy of Sciences and a past president of the Society for Risk Analysis and the Society for Judgment and Decision Making.
A nationally-recognized expert in the risk communications, he shared his thoughts with High Stakes™:
Is the nuclear power industry doing enough to communicate with external stakeholders at a time when government and public perceptions will likely decide its future?
Baruch Fischhoff: At the local level, nuclear utilities often reach out to the plant communities whose trust they need to maintain or expand operations. Two-way communications afford them the intelligence needed to identify problems and opportunities. Are labor relations souring in ways that undermine confidence in plant safety? Could local emergency officials use help with their general readiness? Are plant suppliers creating a nuisance?
At the national level, though, the industry appears to be quite isolated. It seems to hope that successful Washington politics will guarantee success. That seems a risky strategy. The industry needs Washington for many things – R&D support, insurance guarantees, waste disposal, transmission line citing permits, etc. But deals cut in Washington may not hold up without a broader base of support. I sense that the industry does not have a clear picture of its vulnerabilities.
What messages should the nuclear power industry send to its key stakeholders?
Baruch Fischhoff: Like any other industry, nuclear power should listen to its stakeholders before it formulates any messages. That requires systematic empirical research. The industry will waste its money if it decides that it knows what the public needs to hear, and then just writes a check to deliver those messages, with good production values but without supporting research. Although the research might be proprietary, it should meet the methodological standards of publication in peer-reviewed journals. If the industry can’t judge research quality, then it needs to staff up with people who can.
One guess, based on other research, is that nuclear power will receive the most positive hearing if it is seen as part of a comprehensive solution to our energy problems. This way of generating additional energy will be more acceptable if coupled with aggressive energy conservation, reducing our overall energy need. That coupling would demonstrate that the industry is concerned with more than just its own welfare and that it is ready for a fair fight with other energy technologies. Of course, these are just guesses about what’s on the public’s mind. The stakes are too high for the industry to rely on guesses, even mine.
Of the myriad audiences that the nuclear power industry must reach, which are the most important?
Baruch Fischhoff: The industry’s success in extending the life of existing plants owes something to its ongoing communications with plant communities. Its success at opening the door for new plants owes much to its intense communication with Washington insiders – as well as its strategy of expanding on existing sites. Anticipating strains on these relationships should be a priority. What will actual construction and operation be like? Who will get the jobs? Who will compete for financial guarantees? Who will promise getting plants online more quickly?
Of the myriad audiences that the nuclear power industry must reach, which are the most important?
Baruch Fischhoff: The industry’s success in extending the life of existing plants owes something to its ongoing communications with plant communities. Its success at opening the door for new plants owes much to its intense communication with Washington insiders – as well as its strategy of expanding on existing sites. Anticipating strains on these relationships should be a priority. What will actual construction and operation be like? Who will get the jobs? Who will compete for financial guarantees? Who will promise getting plants online more quickly?
Assuming that these partnerships hold, the industry should systematically think through the needs of others affected by the rollout of its plans. Communities affected by traffic or transmission lines? Capital markets worried about the stability of public support? Suppliers? Unions? Electric utilities? Consumer groups that want energy sources reported on smart meters?
Beyond that, the industry should expand discussions with its traditional opponents (other than those committed solely to its demise). I sense that many environmentalists are rethinking the issues of nuclear power compared with those raised by bio-fuels, coal, turbines, low-head hydro, etc. Their support would, of course, carry great weight. But securing it requires approaching them in a genuinely collaborative spirit. Insincere conversations would be worse than a waste of time.
I don’t see much value to broadcasting messages to the general public if comes at the price of listening to individual citizens’ concerns.
Blogs and the energy industry
With a new Zogby poll released this month showing that online news sources are not only more widely read, but more trusted than traditional media, the blogosphere is now an absolutely essential piece of any reputation management strategy. For the energy industry, it is a clearinghouse for the latest scientific and legislative developments while providing intelligence on the crises that may be lurking.
Here’s are five blogs you should be watching:
The Energy Law Blog
Published by energy law firm Liskow & Lewis, The Energy Law Blog provides important insight into legal issues affecting oil and gas exploration, development, and marketing.
National Journal's Energy & Environment Blog
A broad panel of energy industry experts discusses important issues of the day, including renewable energy, carbon emissions, and legislative action. A must-read for anybody who wants a finger on the pulse of the latest energy developments.
TreeHugger
TreeHugger is the most widely read environmental blog on the Web, ranking #17 on Technorati’s top blogs list. This blog is a must for the energy industry and a valuable source what’s coming next from the environmental lobby.
AutoGreenBlog
Devoted to environmental developments in the automobile industry, AutoGreenBlog is a valuable source of information on hybrids, gas consumption, alternative fuels, and more.
EcoGeek
With nearly 100,000 unique monthly visitors, EcoGeek is an essential resource on alternative energy developments and provides unique insight on what’s coming next.
What’s next? "Greenwashers" in the spotlight
According to a study recently released by environmental marketing firm TerraChoice, the number of “green” products on the market increased by more than 75 percent between 2007 and 2009. While most consumers see this as a step in the right direction, growth in the green market has been accompanied by a corresponding uptick in “greenwashing” suits against companies alleged to be exaggerating the environmental benefits of their products.
S.C. Johnson, Procter & Gamble, and American Honda Motor Company are only a few of the companies targeted in lawsuits nationwide. as questionable green claims create a new false advertising litigation frontier, companies must act now to limit the reputational and bottom-line liabilities that can arise when going green.
To protect your green brands:
Be transparent. As Keri Powell, a staff attorney at the environmental law firm Earthjustice, has said, the problem is that “we just don’t know” whether allegedly “greenwashed” products are eco-friendly or not. That means companies must communicate the environmental benefits of their products to consumers as clearly as possible. List ingredients on your product packaging even if you are not required by law to do so. Devote a portion of your Web presence to explaining precisely how your green products protect the environment. Never say "no-comment" if questions about your green commitment arise.
Engage environmentalists. Transforming critics into partners is a time-tested crisis communications strategy. Mollify detractors and further demonstrate your commitment by offering environmentalists a seat at the planning table. Publicize the fact that former adversaries are working together for our colective environmental security.
It’s your planet too, so say so. From the board on down, everyone associated with your company must breathe the same air, drink the same water, and inhabit the same natural environment as everybody else on the planet. Build credibility by highlighting the human motives that gave rise to your green efforts.
This month's top posts on Levick's...
Larry Smith sat down with Nell Minow, the "queen of good corporate governance," to gain her perspective on how boards can prepare for crises, address executive compensation challenges, and ensure effective shareholder communications.
As the online outcry over AT&T's iPhone pricing structure reached fever pitch earlier this month, Dallas Lawrence outlined how AT&T can transform crisis into opportunity.
During a seemingly endless string of recalls in 2009, Bretty Berty and Mike Rozembajgier of Stericycle's Expert RECALL team review proven best practices in recall logistics and communications.
Dallas Lawrence looked at why forward-thinking companies would be wise to take note of last month’s Maureen Dowd plagiarism scandal, as it highlighted the growing influence of bloggers on the mainstream media.
Incoming ABA President Carolyn Lamm spoke with Larry Smith about how economic crisis, the Internet, and today’s multinational business culture are changing the legal profession.
Just Published
When news cycles are measured in minutes rather than hours, rapid responses to crisis are absolutely essential to winning the communications battles.To help ensure success in the Court of Public Opinion, Levick Strategic Communications presents the second edition of the Crisis Communications Desktop Reference. Featuring updates on issues of critical importance to communicators - as well as a comprehensive look at the issues arising out of the current economic crisis - it is a fully searchable, downloadable desktop resource covering more than two dozen topics of urgent concern to business. It provides, with a click of the mouse, the strategic guidance you need the moment a crisis strikes. Download the complementary Crisis Communications Desktop Reference today.
Making Your Point
Making Your Point, a new book by Levick Senior Vice President David Bartlett, examines the fundamental strategic considerations driving effective communication. It defines that key component called “emotional intelligence.” It provides the simple powerful tools to make a point in person, prepare and deliver effective speeches and presentations, get messages across in a media interview, and communicate during crises. Making Your Point is an easy-to-use communications guide for professionals and non-professionals alike. Order your copy today.
Making Your Point, a new book by Levick Senior Vice President David Bartlett, examines the fundamental strategic considerations driving effective communication. It defines that key component called “emotional intelligence.” It provides the simple powerful tools to make a point in person, prepare and deliver effective speeches and presentations, get messages across in a media interview, and communicate during crises. Making Your Point is an easy-to-use communications guide for professionals and non-professionals alike. Order your copy today.
Stop the Presses: The Crisis and Litigation PR Desk Reference – now in its second edition – is a survival manual for corporate leaders, board members, lawyers, and communications specialists. This book provides the dos and don’ts of crisis planning and communications and articulates the essential strategic guidelines for navigating myriad bet-the-company issues. Order your copy today.Future High Stakes™ issues
Directorships in the Era of Accountability:
As corporate governance drives the agenda in Washington, how can board members position themselves as drivers of reform?
As corporate governance drives the agenda in Washington, how can board members position themselves as drivers of reform?
Patents & IP Litigation:
High-profile intellectual property cases threaten to sink stock prices. How can companies protect themselves in the wake of a negative ruling?
High-profile intellectual property cases threaten to sink stock prices. How can companies protect themselves in the wake of a negative ruling?
Antitrust:
The President and Congress are talking tough about antitrust enforcement. What can companies caught in the crosshairs do to limit their exposure?
More to come:
The President and Congress are talking tough about antitrust enforcement. What can companies caught in the crosshairs do to limit their exposure?
More to come:
- Diversity
- Education
- Executives Behind Bars
- Food
- Global Capital Markets
- Intellectual Property
- Internal Communications
- Internal Investigations
- Monetizing Moments
- Money Laundering/Money Transfers
- New Media/Social Networking
- Product Liability
- Professional Services Crises
- Public Equity
- Whistleblowers
- Reputation Management – Celebrity
- Reputation Management – Corruption
- Reputation Management – SEC Investigations
- Tourism
- Trade
Next month in High Stakes™: Directorships in the Era of Accountability