Consulting, the Bane of the Oil & Gas Industry

An interesting document published by Wikileaks reveals how oil companies have attempted to handle the challenge posed by environmental opposition to the North American shale boom-and how they were wrong-footed by ill-conceived analysis by arm-chair consultants.

The document in question came from Stratfor, which has made its biggest fame thanks to the publications of the company's hacked files and emails by Wikileaks. We will refrain from speculating on the end-user of this document--a Power Point presentation called "Oil Sands Market Campaigns"-but specific wording and mentions offer some hints.

The overall advice offered by Stratfor was for the industry to ignore the increasing campaign against oil sands expansion on the premise that the activist groups didn't have the necessary political influence to pose a real challenge. Specifically, the document suggested that zero response by the oil industry would work based on the fact that "activists are not stopping oil sands' growth and they have no power in Alberta or Ottawa. Chance of success with U.S. government is slim." The prediction was that if companies simply ignored the oil sands activism, the activists would simply refocus all their attention on something else, like fracking.

The document paid only lip service to the "worst-case scenario" in which this campaign would grow to be the most influential environmental movement in history. It is this worst-case scenario-the least probable according to the document-that has come to pass, as attested to by the delay in Keystone XL and the snowballing protests across North America, among other things. We are no longer talking about non-profit groups in this activism, but large and very influential power brokers like the Sierra Club and the Natural Resources Defense Council-and even then, back in 2010 when the document was released, it would have been less than intuitive to suggest that the campaign could involve only activists with no political influence.

"Consulting" is a tricky business, and while Wikileaks has catapulted Stratfor into fame, for anyone who has taken the time to read the leaked documents-not only the analysis, but also the hacked email exchanges among staff providing analysis-the overriding conclusion can only be that this is not the stuff of great minds, nor is it the choice when discretion is paramount.

Amid this cacophony of protest and response, another idea has emerged-the use of social media by the oil and gas industry. This is basically a method of fighting fire with fire, and as Foster Marketing notes in a report, the oil and gas industry remains skeptical about the use of social media and the results it can achieve, despite the fact that it has achieved clear results for activists.

Certainly social media has played a key role in the activism surrounding Keystone XL, with great affect, but it can also work in the opposite direction. In a recent Bloomberg National Poll, 56% of respondents thought Keystone XL had the potential to reduce dependence on oil imports from "less reliable trading partners." Only 35% view it as a "potential source of damaging oil spills and harmful greenhouse gas emissions." Social media can play a clear role in shaping this balance.

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James Stafford
Editor, Oilprice.com