I frequently speak to energy industry groups, and one of the most common questions I get is: What can the industry do to improve its public image?
There's no simple answer, but a big step would be greater transparency on environmental issues, especially those that directly affect people's quality of life.
Gov. Rick Perry recently signed the first state law that requires drilling companies to disclose the chemicals they combine with water and sand to fracture shale rock deep in the earth and extract oil and natural gas.
Other states regulate the hydraulic fracturing, or fracking, process, but Texas is now the only state with a law that, beginning next year, requires companies to publicly post the chemicals and the amounts used in drilling wells.
The Texas law was passed with the support of many companies that use the process, and the industry clearly hopes it will allay growing public concern about what is being injected into the earth and whether it could affect drinking water.
At Chesapeake Energy's annual meeting earlier this month, CEO Aubrey McClendon, a longtime proponent, told investors, "We have seen the light."
That raises another question: What took McClendon and others so long?
The industry clearly believes much of the concern about fracturing is overblown, fueled by a lack of public understanding of the process. It may be right, but that misses the point.
Fears grew and grew
While the industry tried to brush aside public concern, misunderstanding mounted. A documentary that offers little more than circumstantial cause-and-effect footage of a flaming faucet was nominated for an Academy Award. Public fears about fracking have reached a fever pitch akin to the Roswell Incident.
While environmental groups cautiously praised the new law, they were quick to note that it doesn't go far enough. Translation: This ain't over.
Oil companies have become such convenient villains, especially for environmental groups, because they are so willing to play the role.
By refusing for years to say what they were injecting into the ground, energy companies only fueled the fears of a public that was already uneasy about wells encroaching on suburban neighborhoods.
Only sand and water
At first, companies insisted that only sand and water were used in the process. Only later, after reports surfaced that other chemicals were included in the drilling fluids, did the industry admit they were. The industry insisted the chemicals weren't harmful. Then, it turned out some, especially those used in the past, were. And even after all that, they refused to reveal exactly what chemicals were still being used.
As the controversy grew, the industry's knee-jerk response was to close ranks. Almost two years ago, I spoke with a frustrated PR guy in the Dallas area who was advising companies drilling in the Barnett Shale near Fort Worth to tell concerned homeowners what was being injected into nearby wells.
He couldn't get his clients to understand that the more they resisted, the more they fed public distrust over the entire drilling process.
Secrecy in the extreme
Companies claimed that the ingredients were some sort of secret recipe, and revealing the contents would hurt their business.
The most closely guarded corporate secret on Earth is the formula for Coca-Cola. Yet every can lists the contents.
This was a problem the industry could have fixed quickly. Yet, when controversy arose, it headed for the bunker. It once again failed to understand the cost of losing credibility with the public. Secure in its own science, it simply dismissed the concerns, ignoring the rising outcry until far too late.
Now, it sees the light, but by now, that light isn't bright enough to silence the controversy.
Loren Steffy is the Chronicle's business columnist. His commentary appears Sundays, Wednesdays and Fridays. Contact him at loren.steffy@chron.com. His blog is at http://blogs.chron.com/lorensteffy.
