BP’s green makeover stifled backlash after oil spill, study shows

HOUSTON – Before the worst offshore oil spill in U.S. history, BP’s multimillion-dollar advertising machine convinced surveyed American consumers it was the most environmentally friendly oil company, university researchers wrote in a recent paper.

The London oil giant’s eight-year “Beyond Petroleum” campaign, which raised sunny logos over its gas stations and promoted its greener side, also softened the consumer backlash against BP after the U.S. Gulf of Mexico oil spill in 2010.

It’s a case that proves the power of green advertising, researchers from the University of Maryland and other institutions found in their study of gasoline prices at more than 7,500 BP-branded stations before and after the oil spill.

During the spill, BP’s gasoline prices fell an average of 4.2 cents per gallon more than nearby competitors. The company’s fleet-card holders bought 3.6 percent less gasoline, as well.

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At their peak declines in August 2010, shortly after the gushing Macondo well was capped, BP gasoline prices had fallen 6.1 cents and sales volumes had dropped 6.7 percent.

But the $200 million in ads that BP had splashed across newspapers, televisions and billboards in the mid-2000s left their mark. In places where BP had promoted itself the most, consumers threw the fewest stones.

During the 87 days that oil spilled into the Gulf, the company lost an average 5 percent of its share of BP-branded stations across markets that had lower levels of “Beyond Petroleum” advertising.

But in regions where BP had advertised thoroughly, gas station owners did not lose enough money to drive them to switch brands.

It didn’t take long for consumers to push BP’s gasoline prices back up to normal levels after the Macondo well was sealed in September 2010.

“On average, consumers acted to punish BP during the spill rather than permanently revise their preferences for the BP brand downward,” the researchers wrote. They also found “that consumers punished BP significantly more in areas with larger shares of hybrid vehicles.”

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In the past two years, BP has changed its advertising tactics. The company has run several ads attacking some damage claims and administrators running the multibillion-dollar settlement fund.

That shift and other hardline maneuvers have led legal experts to believe BP will not settle with the federal government over Clean Water Act fines before a federal judge rules on how much BP owes for the Gulf oil spill.

The company could owe up to $18 billion in environmental fines. BP has set aside $42.7 billion for oil spill costs, an increase of $200 million in the fourth quarter.