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Large U.S. Oil Companies Embrace Energy Efficiency

By Patrick Crow  

The biggest U.S. oil companies are capitalizing on their support of energy efficiency to add a "greener" glow to their public images.

Despite the fact that these corporations are in the business to sell energy, they are urging consumers to use less of it - or at least less oil and gas. They are not promoting outright conservation (when a homeowner turns the heat down and puts on a sweater), so much as they are promoting efficiency (when a homeowner installs a new furnace that burns less fuel).

The companies are using an array of public relations tools - speeches, advertisements, advocacy groups, and grants - in campaigns to publicize the fact they favor energy efficiency. Although they have long been efficiency advocates, now they are much louder, much more fervent, and much more determined to be seen as the major ally of energy consumers in the battle against high prices.

Carol Werner, of the Environmental and Energy Study Institute, told eJournalUSA in an interview that soaring crude oil prices had a lot to do with this trend. "There was a lot of outrage directed at the oil companies last year [2008] as prices skyrocketed and sent a shock through the economic system. Talking about reducing energy use was one way for the oil companies to deflect some of that anger."

Although the growth of the public outreach campaigns did seem to parallel the steady rise in crude prices, which went from $60 per barrel in mid-2007 to a peak of $147 in mid-2008, oil prices have plunged $100 per barrel since then, but the promotions have continued unabated.

Werner said the oil companies also became conservation converts as they worked to reduce the expenses of operating their energy-intensive drilling rigs, pipelines, and refineries. She said, "The more the companies can drop their consumption, the better it is for their bottom line. Plus it enables them to reduce their carbon footprint, their own greenhouse gas emissions."

The companies have taken those lessons from their own operations and formed subsidiaries to market their expertise to other firms needing to make efficiency improvements. Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, explained, "They see themselves as energy companies and don't want to just ride the 'oil train'."

Larry Goldstein, an analyst with the Energy Policy Research Foundation, agreed. "These companies are constantly reinventing themselves and want to be involved in developing the new technologies," he said. Goldstein explained that the oil firms periodically update their business plans to reflect current operating circumstances. "They have to play in the world that is defined for them; they can't design that world themselves."

The outreach efforts also are an outgrowth of the industry's prior communications miscues, according to John Hofmeister, who heads Citizens for Affordable Energy. Hofmeister, who was president of Shell U.S. from 2005 until last year, said that in the 1990s and early 2000s the companies failed to educate American consumers and politicians about tighter energy supplies and subsequently have lost their trust.

Goldstein said, at this point, the companies are wasting their money with "feel good" advertisements. "The public has little confidence in this industry and little regard for anything it has to say."

Goldstein said the companies' promotions are a manifestation of their competition for market share, just like the glassware gifts they gave drivers who bought their gasoline in the 1960s. "They're all basically trying to look 'green' because they believe that's what their customers expect. It's not necessarily due to the economics of conservation but because the political and public pressures are so great. Nobody can stand up today and say 'no' to conservation and efficiency," he said.

In contrast with the oil industry's public service education campaigns, the U.S. Congress has taken a more pragmatic approach. Earlier this year, it included in the American Recovery and Reinvestment Act an array of incentives for consumers, businesses, and governments to invest in energy efficiency.

That law may not be the final word on the subject either. Congress could revisit efficiency as it considers global warming and energy bills later this session.

For Texas oilman T. Boone Pickens, energy efficiency means using the right fuel in the right way. He has proposed that the United States use more wind and solar energy to generate electric power, reducing the need for natural gas. The surplus natural gas then could be used to displace diesel fuel use in heavy trucks, which in turn would decrease demand for imported oil. On his Internet page, Pickens said his strategy would "buy us time to develop new technologies that will ultimately replace fossil transportation fuels."

The most influential advocate for energy efficiency and alternative fuels in Washington is President Barack Obama. He has declared, "It will be the policy of my administration to reverse our dependence on foreign oil, while building a new energy economy that will create millions of jobs."

The opinions expressed in this article do not necessarily reflect the views or policies of the U.S. government.

Patrick Crow covered the U.S. Congress and federal agencies for 21 years as a reporter for an oil and gas magazine. He now is a Houston, Texas-based freelance writer who specializes in energy, chemicals, and water topics.

This article will appear in the April edition of eJournal USA, Energy Efficiency: The First Fuel.

(This is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://www.america.gov)