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The 2013 Energy Trust Barometer: Mixed Readings

TEC Energy Trust panelWednesday’s panel discussion in Washington, DC on “The Trust Factor” in energy couldn’t have been more timely. The stakes for lost trust seemed especially apparent against the backdrop of an EU probe into allegations of price fixing in the spot oil market, involving some of the industry’s largest players, and coverage of the IRS and Associated Press wiretapping scandals.  The session was hosted by The Energy Collective and communications firm Edelman, which presented the energy-related findings from its latest annual Trust Barometer.  The theme of this year’s survey was a “Crisis of Leadership.”

Edelman found a small improvement in the US public’s trust for the energy industry, compared to last year.  Yet energy’s trust level of 59%, which is slightly better than government’s 53%, falls far short of the 80% trust score for the technology sector, followed by the automotive, food and beverage, and alcoholic beverage industries in the 70%’s. Energy’s position isn’t encouraging, considering its importance to the overall economy, but the details resist a blanket assessment.  Meanwhile, non-governmental organizations (NGOs) enjoyed a big jump in trust from 2012 to 2013, up to 70%.

Trust levels within energy differed widely by energy source, with a 30% gap between renewables, which garnered 65%, and oil at 35%.  Natural gas and utilities came in near the average for energy as a whole, reflecting closer customers connections for the latter, and the technology-driven, cost-saving growth of the former, notwithstanding concerns about hydraulic fracturing.  Although renewables have been involved in some messy bankruptcies and an ongoing debate over subsidies, their reduced environmental impacts and links to cutting-edge R&D puts them closer to the technology end of the trust spectrum.  Oil–arguably just as technology-focused as renewables–suffers from the fallout from events like Deepwater Horizon, and perceptions of inadequate stakeholder engagement.  Yet this disparity in trust levels also creates mutually beneficial opportunities for partnership.

I thought the most surprising findings were those describing how the factors that most affect trust have evolved in recent years. In the past trust could be earned by simply focusing on operational results, including financial performance and company rankings; now that’s just the cost of admission. Engagement with customers and employees, along with business ethics and transparency, topped the list of today’s trust factors. This might explain at least part of the gulf between oil and renewables.  In my experience, oil executives live and breathe operations and shareholder returns, although broader definitions of stakeholder relations have been gaining ground in the last decade or so.  Yet the insular nature of these businesses, which have lived under decades of regulatory and anti-trust scrutiny, works against their embrace of new media and other tools of open engagement with both customers and critics.

The panel discussion that followed the Edelman presentation was also quite interesting.  Paula Gant of the American Gas Association memorably described the synergies between natural gas, renewables and energy efficiency as a symphony.  Jason Walsh of the Department of Energy’s Office of Energy Efficiency and Renewable Energy addressed concerns about the reform of subsidies for renewable energy, while reminding the audience that private investment in renewables stood at $269 billion last year.  Peter Nelson, communications director of Resources for the Future, a nonpartisan, highly trusted NGO, offered his thoughts on the politicization of environmental issues, which seems linked to polarization over climate change.  Robert Dillon, communications director of the US Senate’s Energy and Natural Resources Committee, pointed out that much of the current debate is over facts, asking, “Who owns the facts?”  The panel was moderated by Paul Bledsoe, a veteran of Congress, the White House and policy circles.  His comment that, “It’s a stakeholder world, not a shareholder world,” encapsulated what might have been the key takeaway of the day for companies. 

As good as the panel discussion was, when I left I was still mulling over an implication raised by Amy Hemingway of Edelman in her remarks at the start of the session.  Energy policy involves the intersection of government and energy companies.  It surely complicates the challenging tasks we face, with regard to resource management and environmental stewardship, that much of the public doesn’t trust government or energy to solve our important problems.  Both institutions suffer from serious trust gaps, while NGOs, who as one panelist observed have significantly fewer constraints on their statements and actions, enjoy more trust than either one (or both together?)  Especially for the energy industry, getting things done increasingly requires more than good plans and solid returns. Its “license to lead”, as another panelist described it, must be earned by engaging in activities that usually aren’t second nature for experienced engineers and finance experts.

Geoffrey Styles's picture

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Rick Engebretson's picture
Rick Engebretson on May 17, 2013 4:17 pm GMT

There seems to be a new, highly vocal PR industry that exists to sow distrust. On TEC alone, many are quite obvious. A funny recent example is Mark Green (API) vs. the corn ethanol industry arguing about cost.

So I think the loss of trust is more specific to loss of trust in the PR, not any productive industry as a whole. But government is not industry, and loss of trust has real impact.

Randy Voges's picture
Randy Voges on May 19, 2013 2:04 pm GMT

The wider context is that trust is lacking in every arena of policy discussion.  Immigration, fiscal policy, taxes, foreign affairs, social issues, health care.  Distrust is the rule rather than the exception.

Randy Voges's picture
Randy Voges on May 19, 2013 2:51 pm GMT

I forgot to add that the distrust is far easier to understand if you already believe in Original Sin or you’ve studied the Second Law of Thermodynamics.  Or you’re an Astros fan.

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