Public image problems stretch from land to offshore

HOUSTON — When policymakers in Washington, D.C. look at deep-water development, shallow-water drilling and hydraulic fracturing in unconventional plays, they don’t see any of the distinctions.

Instead, former Assistant Energy Secretary James Slutz said Monday, they paint it with one broad brush: It’s all just “the oil and gas industry.”

That means “a failure in one area will impact other parts of the industry,” Slutz told an audience at the Offshore Technology Conference.

During an afternoon session, executives widely agreed that whether oil and gas development happens far offshore or on land, it shares big public perception challenges. That’s particularly true as companies do more unconventional development onshore, using horizontal drilling and hydraulic fracturing to extract the fuels from dense rock formations, with rigs not far from residences.

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When it comes to offshore versus onshore, there’s more overlap on “getting it right in terms of public acceptance…than technology itself,” said Greg Guidry, executive vice president of upstream Americas unconventionals for Shell.

Onshore, the development unfolds close to local stakeholders.  ”Offshore,” Guidry said, “there is no neighborhood.”

That raises the stakes for onshore unconventional oil development.

“A rancher cares about how you treat the land in a very particular way,” Guidry said. There is a greater chance of upsetting a landowner than  of having a low-probability, high-consequence accident offshore.

But either can give the industry a black eye.

Executives suggested the industry  needs to step up its game in minimizing risks and in communicating that work to the public.

“In terms of industry muscle, our legacy is much more around overcoming the technological challenges,” Guidry said. “We’ve been somewhat inconsistent when it comes to overcoming the non-technological challenges.”