IMAGE Oil/gas industry knows it has a crisis of image. At ...drillingcontractor.org/dcpi/dc-novdec08/DC_Nov08_IndustryImage.pdf · doing a lot of things right,” said John Lindsay,

44 November/December 2008 D R I L L I ND R I L L I N G C O N T R A C T O R

I N D U S T R Y I M A G E

Oil/gas industry knows it has a crisis of image. At last, we’re really doing something about it

IN A WORLD where perception is often reality, an industry that is per-ceived, albeit unfairly, as dirty, danger-ous and greedy can suffer a crisis of image that threatens its foundation and future. But getting the truth out can be a challenge.

In the drilling industry in particular, efforts have accelerated to communicate the advances in technology and greater focus on HSE that are transforming the way contractors do business.

“The industry has had a black eye regarding safety and environmental stewardship, and while it is still a dif-ficult and dangerous business, we’re doing a lot of things right,” said John Lindsay, executive vice president of domestic and international operations for Helmerich & Payne International Drilling Co and 2008 IADC chairman.

Maersk Drilling has put steps in place to duplicate its safety record with an environmental one as well. “Safety has always been a top priority in our com-pany and has become important for the entire industry, including the contrac-tors, rig owners and operators,” said Claus Hemmingsen, CEO of Maersk Drilling and partner at A.P. Moller – Maersk . Mr Hemmingsen serves as 2008 IADC vice chairman.

“For more than 20 years, we have been building some of the most superior rigs in the industry, both in terms of safety and from an environmental standpoint, but we’ve never put much effort into tell-ing people about that, except those we work for directly,” he said.

“I certainly expect to see that chang-ing within the industry as a whole to work together to benchmark our per-formance and focus on real efforts to improve,” said Mr Hemmingsen, who is preparing for his ’09 IADC chairman-ship. Earlier this year, IADC established the Environmental Policy Advisory Panel (EPAP) to formally address the industry’s environmental activities and image.

Noble Drilling has created a system-wide culture of HSE responsibility for its 6,000 employees worldwide.

“I think the industry has a worldwide image problem, operators and contrac-tors alike, and that’s a pity,” said Ronald Hoope, Noble commercial director , based in The Netherlands. “We are known to be a business that is not environmentally friendly, but that is changing as we are implementing stringent procedures and policies and seeing more technicians and well-educated people coming to the off-shore industry. Offshore is not visible, so the industry needs to do a better job of promoting itself as being safe and envi-ronmentally responsible.”

HOW DID WE GET HERE?To understand how the industry reached this crossroads, it is important to under-stand where it has been, and to take a reality check on public perceptions.

In the case of the US oil and gas indus-try, that reality check came three years ago with a major shift in external audi-ence engagement . Industry leaders rec-

ognized it was time to educate the public and policymakers in a big way about a little-known truth: Oil and gas drilling is safe, clean and technologically advanced, and earnings are being reinvested in exploration that costs billions of dollars.

“What was needed was a thorough understanding of what the industry is all about,” said API president and CEO Red Cavaney .

After measuring consumer and govern-ment attitudes through research, the industry embarked on what Mr Cavaney calls “the battle for the public mind”: a focused, collaborative, multi-faceted effort culminating in one mission – edu-cational advocacy.

“For several decades, companies in the industry appeared to view their adver-tising as more focused on product and brand, and not much in institutional advertising or education,” Mr Cavaney explained.

By Katie Mazerov, contributing editor

Maersk Drilling builds and operates safe and environmentally friendly drilling rigs, like the Maersk Innovator, according to CEO Claus Hemmingsen. The public needs to under-stand this industry better so we can attract the new generation into the business.



But events such as the 1969 oil spill off the coast of Santa Barbara in California prompted environmental concerns among the general public, which some believe led to the ban on offshore drill-ing.

“When impacts on public policy develop-ment began to shift outside the domain of state legislatures and Congress, to where the public had a much stronger voice in influencing policymakers and elected officials, the industry was slow to change with the times,” Mr Cavaney continued. “As a result, for several decades, the stronger voices being heard were opponents of the industry. So you have at least one or two generations of people who have grown up hearing prin-cipally the negative side of the oil and gas industry.”

The industry began to address the prob-lem in the late 1990s, but efforts were limited because not everyone believed there was a problem. It was also ques-tioned whether audience engagement, advertising and education could really change minds, he explained.

The “game changer” came in the wake of the 2005 hurricanes . “After Katrina and Rita, the industry performed in a Herculean manner, unlike anything that had occurred before in terms of mini-mizing lost lives, getting people to rally and respond, bringing refineries back online, getting offshore back producing and pipelines to go back online,” Mr Cavaney said. “And when all was said and done, virtually nobody went without the natural gas or other fuel products they needed.”

Much to the industry’s surprise, instead of receiving recognition for a job well done, the opposite happened. Public outcry over the high price of gasoline sparked hearings in Washington, D.C., where oil company executives were criticized for violating laws and being irresponsible.

“That served as an absolute wake-up call and underscored the understanding throughout the industry that we did not have an option on whether to engage external audiences or not,” Mr Cavaney said. “We needed to do it.”

What resulted is a broad-based effort that includes national advertising pro-moting the industry’s clean technolog ies, outreach programs , increased visibility in local communities and specific audi-ence engagement. Technology is a key element of the message.

“We found that the more people under-stand the extent to which technology drives our business, their appreciation and understanding of our industry as being important to them in the future is increased,” Mr Cavaney said. API began mobiliz ing “tech tours” featur ing interac-tive displays to college campuses and state capitals.

“What we’ve seen happen is exactly what we hoped,” he said. “When people begin to understand some of the basics regarding the industry and its role in providing energy, common sense prevails over a lot of opposition.”

One example of that shift came late this year when the federal government lifted the 26-year-old ban on US offshore drill-ing. Mr Cavaney noted that as the price of gasoline moved toward $4 per gallon, people’s attitudes about offshore drilling

shifted from three in 10 in favor to seven in 10, or better, in favor.

The collaborative nature of the educa-tional advocacy effort is critical . No one element is considered to be more suc-cessful than the others. “You use differ-ent approaches for different audiences and different objectives,” Mr Cavaney explained. “Advertising is good for conveying a simple message. If you’re trying to get a more technical message across ... then print medium or personal contact/direct audience engagement is a much more powerful way to do it. Radio is good for repetition and reinforcement. They are all important.”

Education efforts also are being ramped up by non profit agencies providing materials for schools and museums, and through audience engagement with trade groups.

HSE is embedded into the Noble culture, said Ronald Hoope, commercial director. Leadership courses are given to all crews worldwide, and the $2 million price tag is considered an investment. Above is the Noble Ronald Hoope.

47November/December 2008


D R I L L I ND R I L L I N G C O N T R A C T O R

By Katie Mazerov, contributing editor

EDUCATION EFFORTS THROUGH nonprofit agencies are being increased on a national level in the US to generate awareness about the oil and gas industry and spark career interest in the next generation of workers and students .

The National Energy Education Development project (NEED) provides “comprehensive materials that present a balanced, objective picture of all aspects of the energy industry to help people make smarter decisions,” said exec-utive director Mary Spruill. “We need all forms of energy at our disposal today, and, in the future, teachers and students must have the opportunity to learn about energy in a com-prehensive way .

“Our goal is to give students the background and knowledge of where energy resources come from, and how we extract, harness, produce and use those resources,” she continued.

NEED provides programs in every US state through schools, governmental agencies, advocacy groups and museums. By 2030, the agency hopes to make its materials available to every classroom in the US .

“The support from the energy industry has really moved us forward and created a nice intersection between the indus-try and the schools,” Ms Spruill said. “The industry knows it needs students interested in energy careers, and teachers know the energy industry is an excellent career path for students now and in the future.”

Offshore Energy Center

Among NEED’s partners in its educational efforts is the Offshore Energy Center (OEC), a nonprofit group dedicated to increasing awareness of the offshore energy industry . The OEC not only operates the Ocean Star Offshore Drilling Rig and Museum in Galveston, Texas, but also provides various learning programs for families and children around the US.

For example, the OEC offers training workshops for teach-ers, as well as facilitator training for those “ who want to go a step further and teach our program in other areas of the country,” explained executive director Sandra Mourton. Teachers from California, Nevada, Alaska, Ohio and Louisiana have been trained .

Other OEC efforts include:

• “Expanding Energy Education, ” a book for kindergarten through 12th-grade. It is being expanded to include cross-cultural teaching activities, including math and science, social studies and music .

• Two mobile exhibits – “The Knowledge Box” and “Playing with Petroleum ” – include CDs, DVD, posters, hands-on activities and books that are lent out to Houston-area schools . NEED provides materials for these exhibits.

• T he Mobile Offshore Learning Unit (MOLU) kicked off this year at 25 Houston-area schools . The program includes

Nonprofits step up educational initiatives

Students work on a learning project at the Ocean Star Museum in Galveston, Texas. An estimated 32,000 people visit the museum each year, mostly through school field trips.

Continued on Page 48



“We have been dismayed at how ignorant and uninformed people, including elected officials from oil-producing states, are about our industry,” said Brian Petty, IADC senior vice president - government affairs . “We have gone into classrooms, and kids’ impressions are of an industry that is dirty and dangerous, kills fish and is bad for the environment.”

Offshore drilling is a key example of why the industry has a responsibility to “step out” in its efforts to inform the public, Mr Petty pointed out. “ Oil and natural gas royalt ies is the second-largest source of revenue for the US government, after income taxes.”

The National Ocean Industries Association (NOIA) represents the off-shore energy industry and works closely with associations that represent key

end users of energy, like the American Farm Bureau, the National Association of Manufacturers and the American Chemistry Council. “Our message is that the oil and gas industry, particularly offshore, is more advanced than most people think it is,” said Michael Kearns, NOIA director of external affairs.

“The technology today is cutting edge and rivals the space program in terms of the places we’re able to operate,” he continued. “Add to that an enviable safety record. Also, we talk about the fact that this is a vital energy source for the nation.”

An example of where NOIA has made an impact is with the Farm Bureau. “Farmers across the country are find-ing their fertilizer costs are going up because natural gas is a necessary pre-

requisite in making fertilizer. So their energy costs are going through the roof,” Mr Kearns said. “So, when inland farm-ers realize that the resources beneath the Outer Continental Shelf belong to the United States as a whole, they want to know why they are being prevented by coastal states from having access to them.”

Mr Kearns emphasized that NOIA does not advocate one form of energy over the other. “The fact is, as a nation and as a world, we need all the energy resources we can find,” he said. “And it doesn’t make sense for us to simply cut out con-sideration of offshore oil and gas, espe-cially when the environmental record is so much better than the general public thinks it is.”

GOING ON THE OFFENSIVEOil companies – the “face” of the indus-try – also have embarked on television advertising campaigns to dispel the out-dated perceptions . Some ads acknowl-edge the need for developing alternative energ ies such as solar, wind and biofu-els, a goal supported by API and other groups that are calling for a balanced energy policy.

“A study done last year for the Department of Energy, ‘Facing the Hard Truths,’ concludes – and this is backed by other studies – that for our economy to continue to enjoy the economic growth and improved standard of living we’ve had over the last 10 to 20 years, we’re going to need all the energy we can pro-duce in an environmentally sensitive way here in the United States,” Mr Cavaney noted. “We are supporters of alternative energy, all economically viable forms of it.”

ExxonMobil has put education at the center of a program that includes nation-al advertising, an employee speaking program to generate awareness about how the company is meeting energy chal-lenges, media relations and corporate citizenship.

“There has never been wider spread interest in energy,” said spokesman Alan Jeffers. “People have an incredible appetite for information about the indus-try, and it’s important for us to provide that directly.”

A TV campaign launched in June focuses on commitment to science and tech-nology that is environmentally clean. “The advertising is not promotional, but designed to increase awareness

exhibits featuring hands-on activities about the energy industry. The MOLU aims to help students explore career interests as well.

• Two annual career fairs are held at the Ocean Star, as well as an annual salute to industry interns that includes educational sessions and industry speakers.

The Ocean Star also participates in the International Forum of Energy Centres and Museums (IFECM). Initiated by IADC in 2006, IFECM is a network of energy museums and learning centers working to improve public perception of the industry. The group plans to produce a short film providing an overview of the energy industry, with an emphasis on oil and gas drilling . The film will be featured

in energy centres and museums worldwide and will be available for classroom use.

The Ocean Star museum sees an estimated 32,000 visitors annually, many from school field trips. It has a theater and offers tours and activities for families and children .

“When we have people coming through the museum, many of them simply don’t understand what is involved in drilling for gas and oil,” Ms Mourton said. “With offshore drilling, in particular, they have no idea what it takes to get from search-ing for the oil to getting it to the gas tank. They don’t realize the number of years it can take, and how many billions of dollars can be spent. All they see is the negative media about $4-per-gallon gas.”

ABOVE: A museum docent helps a group of Brownies work on their badges. RIGHT: A group of Scouts on an overnight trip to the Ocean Star . Boy and Girl Scouts use the Ocean Star to earn points for merit badges.

Continued from Page 47



and energy literacy,” Mr Jeffers said. “We need people to understand that the investments it takes to develop new sup-plies of energy are massive.

“We employ 14,000 scientists and engi-neers throughout the world,” he con-tinued, noting that ExxonMobil was the founding sponsor of the National Math and Science Initiative in the United States. “We’re a high-tech industry that is challenged to tap new energy supplies and at the same time reduce greenhouse gas emissions .”

The speaking program encourages people to visit the company’s website, where they can learn about corporate citizenship efforts and the ExxonMobil Foundation, which in 2007, together with employees, retirees and affiliates, donated nearly $207 million to HSE and educational causes worldwide. In 2005, the company launched the Educating Women and Girls Initiative in developing countries to improv e health conditions, reduc e poverty and slow the spread of HIV/AIDS. More than $12 million has been invested in the program in Africa .

At Chevron, the supermajor is delivering an energy efficiency and conservation message through its “I Will” campaign .

“Our intent is to raise awareness of the importance of energy efficiency and conservation and to lead the discussion about what we can do as individuals every day to increase energy savings,” said representative Kimberly Beman. The campaign reflects a culture of con-servation the company has embraced since 1992, she said. “As a company, we are 27% more efficient that we were in 1992.”

Chevron’s website features interactive tools like the energy generator, which “ demonstrates how simple, individual actions can yield large energy savings,” Ms Beman explained. “For example, if 1,000 people lower their thermostat in the winter by one degree in an average US residence, they will save enough energy to power a hospital for 10 days.”

BETTER RIGS,BETTER TECHNOLOGIESFor the drilling and service industries, new technology has enabled them to tap previously unattainable resources in an

ABOVE: ExxonMobil employees in Lagos, Nigeria, volunteer in libraries and classrooms. LEFT: Through the Science Ambassador Program , more than 800 ExxonMobil employees and retirees serve as tutors, judge science fairs and act as mentors and guest teachers. The program emphasizes science, math, and energy education .




environmentally friendly way. Many com-panies are increasing their visibility as good corporate citizens as well.

“The industry has come a long, long way since some of the environmental incidents of the 1960s, ’70s and ’80s,” said Mr Lindsay at H&P . He noted that onshore spills have been greatly reduced, and offshore spills have been all but eliminated.

The FlexRig , an AC-drive design equipped with state-of-the-art technol-ogy, has significantly impacted H&P’s drilling operations in Colorado’s Piceance Basin , in the Rocky Mountains, and in heavily populated areas of the Barnett Shale by reducing rig footprint, noise, traffic and improving efficiency .

“In 2005, we joined with Williams Companies to look at ways we could improve our environmental footprint and change the way wells were being drilled in the Piceance Basin,” Mr Lindsay said. Conventional rigs were drilling three to five wells on a pad and being moved manually from well to well, which required bringing in trucks and bulldoz-ers .

“Working with Williams, we designed a rig that took offshore technology to an onshore environment,” he continued. “The FlexRig could drill 22 wells on a single, 1.5-acre location. Once on a new location, we didn’t need outside trucking or bulldozer companies to move the rig on the remaining 20-plus wells. It was all done with internal hydraulics on the rig.”

The design has allowed the company to drill in much shorter periods of time , thereby lessening impact on wildlife and local residents .

“This was a game-changer,” Mr Lindsay said. “It really made a difference in terms of reducing noise, truck traffic and building fewer locations. The new rigs also have the latest technology diesel engines, which reduce emissions, improve fuel efficiency and burn less fuel.

“And on the safety side, we’ve sig-nificantly cut the number of incidents because the rig design is much safer than rigs designed 30 years ago,” he added. “As drilling contractors retool their fleets, they are seizing an opportu-nity to utilize safety-by-design that here-tofore has not been seen.”

The FlexRigs also enable H&P to simul-taneously produc e gas and drill . “They are able to frac wells in batches, which

offer some attractive benefits,” Mr Lindsay explained. “Advantages include fewer frac trucks going up and down the road; re-using and thereby conserving water; and limiting the frac footprint. In this case, everyone wins.”

In the Barnett Shale, the FlexRig has been employed in populated areas , next to schools and residential areas where children play and where truck traffic and noise are big concerns. “Drilling is a 24/7 activity,” Mr Lindsay said. “People want rigs that are quiet. One of the many advantages of AC-drive technol-

ogy is the elimination of the screeching brake heard with a conventional rig that echoes for miles. The AC rigs drill faster so, again, we’re able to develop the fields more quickly, and get the drilling rigs out of the public eye more quickly.”

The FlexRig also has been instrumental to fostering good community relations. “Through our work with Devon Energy, Encana and other E&P companies in the Barnett Shale, we’ve been able to use the FlexRig as recognition that we are doing things differently,” he said. “We also focus our people’s efforts on not lit-



tering in the area, driving cautiously and to treat these areas like it’s their own . The bottom line is that this is the right thing to do.”

At Maersk, Mr Hemmingsen points to his company as an example of action he would like to see the industry take. In 2007, the company put an environmental reporting system in place and began collecting data on emissions and fuel consumption to establish a baseline for improvement. “Now that we have more than a year of data, we are starting to set targets for our performance,” he said.

Another important issue is making the industry an attractive one for people to join. “I think we have a huge challenge in attracting people to the industry in general due to growth of the industry

and the demographics of the current workforce,” Mr Hemmingsen pointed out. “We need to make an effort to communi-cate that the drilling business is a good career platform and holds good potential and a good record.”

Maersk Drilling also has been visible in communit ies where the company has a long-term presence.

“For example, we have been in Norway for close to 15 years and have been engaged with the local communities both on an advisory level and in the community at-large,” Mr Hemmingsen said. “In Venezuela, where we have been operating for 20 years or so, we have huge programs where we work for the betterment of local communities, assist-ing with education efforts and local projects.”

At Noble Drilling, “HSE is embedded in our culture and part of our daily opera-tions in everything we do,” Mr Hoope noted . “Each year we provide leadership courses to all our crews worldwide, in effort to mold responsible behavior and have everyone in the company moving in the same direction.” The company considers the $2 million it spends on the course to be an investment.

ABOVE: Halliburton employees stand in the shape of a heart to recognize em-ployees’ efforts through the Halliburton Volunteer Councils . The program partners with local charities to focus on the im-mediate needs of the community. LEFT: Helmerich & Payne’s FlexRig4S operat es in Colorado’s Piceance Basin. The rig was designed with offshore technology for an onshore environment.




“We also sponsor Noble Safety Day, where we invite our third-party contrac-tors, which are related to 25% of our incidents, to come and learn about how Noble works, including our policies, pro-cedures and protective equipment,” he said. “Our incident records are already low, but we want to reduce incidents even further, to zero.”

Noble also has daily and weekly safety-related conference calls , so if an incident occurs on a rig, the company can imple-ment measures if needed.

“We promote waste reduction and recy-cling of waste in our efforts to be environ-mentally focused and not leave any foot-print behind,” Mr Hoope said. “We are very aggressive in cleaning rainwater. Any drip of oil from a cable is cleaned.”

Noble also produces an annual Sustainability Report and is listed on the Dow Jones Sustainability Index. “This shows that we are very transparent because we publish our problems and our mistakes,” Mr Hoope noted.

The company also is visible in the com-munities where it operates. “We support charities and work as much as we can in communities to hire local people, vendors and contractors, such as rig builders,” he pointed out. “Our next step is to go to the local schools and recruit employees who are educated and can provide the technical expertise the industry needs,” he said. “Education is better for safety.”

GIVING BACKHalliburton’s corporate citizenship efforts include volunteer efforts world-wide and a corporate giving program that in 2007 raised nearly $353 million for education, health and social services organizations, the environment and arts. Employees volunteered more than 30,000 hours in 2007 in communities in Russia, India, Egypt, Saudi Arabia, Brazil, Venezuela, Nigeria and Norway.

“At Halliburton, we believe in giving back to the communities where we live and work – it’s as much a part of our culture as providing exceptional service to the customer,” said Diana Gabriel, senior manager, communications for the com-pany. “We support a wide variety of char-itable organizations around the world, with an emphasis on those that are most important to our employees, customers and communities.”

Donating blood, raising money for medi-cal research, tutoring and mentoring students, delivering meals to the elderly,

planting trees and helping with environ-mental cleanup are among ways employ-ees can volunteer, Ms Gabriel said. Another program, Giving Choices, allows employees to donate to the charity of their choice .

“Another way we contribute to our local communities is through Halliburton Volunteer Councils, which are created by local employees who establish their own bylaws, elect officers and decide which local organizations to support,” she said. “All around the world, you’ll find Halliburton employees building

playgrounds, feeding the hungry, rais-ing money to fight diseases and caring for those who need our help the most.” The councils partner with local charities to focus on the immediate needs of the community.

“Being a considerate and helpful neighbor has been fundamental to Halliburton’s culture from the earliest days of the company,” Ms Gabriel said. “We believe that improving the quality of life in the communities where we oper-ate is good business. It’s the right thing to do.”

Documents

IMAGE Oil/gas industry knows it has a crisis of image. At ...drillingcontractor.org/dcpi/dc-novdec08/DC_Nov08_IndustryImage.pdf · doing a lot of things right,” said John Lindsay,