July 9, 2014

Community Engagement New Oil And Gas Priority

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A protester at an anti-fracking march in New York in 2012.

CREDO Policy Summit via Flickr.

A protester at an anti-fracking march in New York in 2012.

It’s called the “social license to operate” — the idea that, in order for an energy project to succeed, a company needs to get buy-in from the community.

“You don’t get your social license by going to a government ministry and making an application or simply paying a fee,” writes Pierre Lassonde, president of the Newmont Mining Corporation, on the website of Robert Boutilier, who coined the concept in the 1990s, “It requires far more than money to truly become part of the communities in which you operate.”

Due to very public opposition to oil and gas development in parts of the U.S., energy companies are increasingly acquainted with the concept. This week, their trade group, the American Petroleum Institute, showed it understands too, by issuing its first-ever “Community Engagement Guidelines.”

API acknowledged that many of today’s newest oil and gas booms — like the Marcellus in Pennsylvania, the Bakken in North Dakota, and the Niobrara along the populous Front Range of Colorado — are taking place in areas that are unfamiliar with and not particularly friendly to oil and gas development.  Thus, in order to “promote oil and gas development that results in a positive experience for communities,” API offers suggestions for all stages of the boom, from exploration to exit.

Many of API’s suggestions seem so obvious, like “engage, listen, and field questions” during the exploration phase of development, that you hope whoever reads these guidelines has thought of it before.  Other suggestions, like developing a local hiring strategy, could win over the local community by ensuring they will share in the profits of the boom, not just the negative side-effects like increased traffic, pollution and crime.

Tucked among the suggestions on how to be a good neighbor is the realization that, in the end, the focus is still on resource extraction. API suggests companies “maintain relationships with surface and mineral owners, include specific information addressing their reasonable needs and issues.” What’s reasonable to a surface owner, of course, may not be to an oil company.

The guidelines are significant in the context of the many showdowns between the oil and gas industry and communities around the country. As Inside Energy’s Dan Boyce has reported, the battles are especially pitched in Colorado. If supporters there gather enough signatures for their ballot measures, voters will decide this November whether local governments get more control over oil and gas development in their communities.

API didn’t pioneer the idea of issuing “community engagement guidelines.” New Mexico, for example, already has its Good Neighbor Program, with nearly identical goals. Still, for a large national lobbying organization like API to roll these out suggests that acquiring a “social license to operate” is becoming increasingly essential for oil and gas companies in the US.