Managing Aboveground Risks: Experience from the United States
It wasn’t long ago that oil and gas producers could focus almost entirely on belowground challenges, but fracture gradients and reservoir management aren’t the only things on producers’ minds anymore. Indeed, the blunt mechanics of harvesting oil and natural gas from deposits several kilometers underground have suddenly become the easy part, while managing aboveground risks has become much more challenging – and similarly much more important. This paper explains the tools and tactics used to manage aboveground risks, primarily drawing from relevant experiences in the United States. In 2009, FTI Consulting teamed up with the Independent Petroleum Association of America (IPAA) to launch a program called Energy In Depth (EID), a research, education and rapid response platform specifically focused on telling the story of unconventional development. EID has grown over the past several years into what many now consider the industry’s lead research and rapid response platform on issues relating to onshore oil and natural gas production. Above all, EID serves as a platform for setting the record straight. It has engaged and educated the public and held the opposition accountable. It has protected and preserved the social, political and regulatory license to operate of many oil and gas producers. And it has delivered the information to the people who needed it in a way that is both relevant and actionable. EID has been so successful that it has been used as a model for other coalitions and public outreach campaigns. Some of the key tools used by EID include a strong internet profile, collateral materials, social media, and accurate media monitoring. But more importantly, a successful rapid response campaign must make a constant effort to interact, educate and assist reporters, identify every case of misinformation and rebut and update the media, the government, regulators and the general public daily with direct, tailored and useful information.
The age of focusing almost exclusively on technical, belowground challenges is over. Now, producers are more concerned with managing aboveground risks, a recent occurrence that has become increasingly challenging and critical to their license to operate.
Aboveground risks are not technical or easily quantifiable but their impact can adversely affect a company’s reputation, project completion schedule, and investment status. They can be best described as risks of activist opposition, concern and outright hostility from local communities, regulatory issues, and governmental pressures. These types of risks exist all over the world in one form or another and are not easily contested. In today’s world, even the smallest local issue can become global in a matter of seconds.