Lentis/How Energy Companies Rebrand Themselves

Introduction

In 2010, the Deepwater Horizon drilling rig exploded, spilling over 200 million gallons of oil into the Gulf of Mexico . BP P.L.C, then known as British Petroleum, was held responsible. Ironically, BP rebranded itself as “Beyond Petroleum” in 2000, in an attempt to appear environmentally conscious and shed the negative image associated with the oil industry . However, after the Deepwater Horizon oil spill, there was an apparent disparity between BP’s “Beyond Petroleum” brand and their actions. This is public relations at its finest. It perfectly exemplifies how a company attempts to shape how it is perceived by misleading the public.

BP is certainly not alone, especially within the oil and petroleum industry. The oil industry is held in very low regard by the public. According to one poll, it was the most negatively perceived industry in America from 2001 to 2010 . At the same time, many people lament the vast influence the oil industry has.But, these companies are not invulnerable. Current events like gas prices, public policy, and oil spills heavily affect the public’s already negative perception of the oil industry; and in 2005, when hurricane Katrina caused gas prices to skyrocket, it was no coincidence that ExxonMobil, BP, and Chevron started spending more than 50% more on their advertising budgets . They understand it is beneficial to have the public on their side, or at the very least, not vehemently oppose them.

Rebranding Techniques

From Oil to Energy

However, people do not like oil companies. This gives them all the more reason to rebrand themselves as not-oil companies, hence “Beyond Petroleum”. Between 2001 and 2003, 15.1% of energy companies rebranded themselves , mostly due to industry related image problems . The two largest oil companies in America, ExxonMobil and Chevron, clearly present themselves as “energy” companies on their websites . The third largest oil company in America, Valero, does not feature the word “energy” on their website . They are, however, formally known as Valero Energy Corporation. The use of the word, “energy”, is not illegal or even inaccurate in these cases. But it is certainly deliberate. With recent shifts toward environmental awareness, oil companies have even more incentive to call themselves “energy” companies. Not only does “oil” elicit notions of greed and corruption like in the day of John D. Rockefeller and his Standard Oil Empire, but it also feels dirty in a very literal sense.

Many companies are shifting their advertisements to acknowledge climate change and highlight alternative energy efforts. In a speech he gave at Stanford University, BP’s CEO was the first to acknowledge the energy sector’s role in climate change stating: “Ladies and gentlemen, climate change is a reality and we are partly responsible” . In 2013 BP launched an ad campaign highlighting its alternative energy efforts. Soon after, BP sold its entire U.S. wind energy business, and had already left the solar energy business in 2000 . While their advertisements may indicate environmental awareness, they do not necessarily reflect the true values and investments of oil companies. In August 2016, Exxon launched an ad that listed areas of study and investments that they were pursuing, highlighting biofuels specifically. While the ad implies that alternative energies are a significant part of their company, ExxonMobil CEO, Rex Tillerson, had this to say about alternative energy investments: “We choose not to lose money” .

Greenwashing

These attempts to present an environmentally friendly image are examples of greenwashing. It is a tactic commonly used in the oil industry, where companies use public relations and advertisements to imply they are more environmentally friendly than they are. After the Deepwater Horizon oil spill, BP launched an “it’s a start” campaign with ads that made vague claims like “a cleaner turnpike” and “a better pipeline.” These statements are followed by “it’s a start” . This is an example of the lesser of two evils approach where they claim that doing something is better than doing nothing when in reality they are doing very little. It allows them to present themselves in an environmentally friendly light without having to change much of what they actually do.

Rebranding and Regulation

Loopholes

It seems like it should be illegal to mislead the public in this way. To some extent it is. Energy companies are subjected to various laws that require public information about how their operations affect the environment. These laws also apply when companies market their products. Section 5 of the Federal Trade Commission Act (FTC Act) prohibits “[u]nfair or deceptive acts or practices in or affecting commerce." For example, a company cannot use the words “ecologically-safe” without being able to prove that the ingredients in their product does not negatively affect the environment. However, there are multiple loopholes that companies use.

One of these loopholes is the Federal Trade Commission’s inability to pass specific environmental laws, particularly those related to advertising. Since the FTC looks at each complaint on a case-by-case basis, more often than not the results that stem from the investigation only apply to the company the FTC was concerned with. These results tend to be selective and very contextual and may not provide guidance for any future cases.

Another possible complication is the jurisdictional issues the FTC faces. Depending on the type of complaint, especially when it comes to environmental complaints, the ultimate judgement may be more suited for the EPA versus the FTC. An even greater issue may be between the federal and state governments . Because state governments tend to have different environmental plans depending on popular job sectors in their state, it is very difficult for the FTC to create an overarching environmental law without potentially suppressing a state’s revenue if it is based on environmentally-risky enterprises such as coal or oil.

Politics

Energy marketing also plays a big role in the political system. Advertisements related to energy, environment, and climate change have been becoming popular in political campaigns. Many candidates appeal to voters by highlighting their agreement with any energy or environmental policies that best suit the state they are running in. In states where many rely on jobs in the petroleum or coal industry. such as Kentucky and West Virginia, political candidates incorporate pro-coal messages into their advertisements. In states that prefer more renewable energy such as Colorado and Iowa, a majority of the energy stances of political candidates are anti-oil and pro-green energy . Energy advertisements are being used by both industry and the political system to highlight the advantages of oil and gas on job creation, but they are also used to expose the negative effects of these enterprises.

Environmental Groups

Environmental groups are much more effective at “regulating” oil companies. Environmental organizations like Greenpeace consistently oppose oil companies. They attempt to expose what they believe are the oil companies’ true motives, making it all the more important for oil companies to present themselves to consumers as environmentally friendly. Greenpeace publicly shamed BP after the Deepwater Horizon oil spill, launching a contest for a logo redesign, the winner of which depicted the sunburst logo shadowed by animals covered in oil . Similarly Greenpeace made a video titled “Everything is NOT awesome” showing a Lego Santa in the arctic drowning in oil, pressuring Lego to drop their partnership with Shell . In 2014 Lego dropped their 50 year partnership with Shell, and soon after, Shell abandoned arctic drilling . Environmental groups target oil companies’ images, causing the oil companies to not only change their actions but also spend millions on public relations.

Looking Forward

Greenwashing is not limited to the oil industry, or even the energy industry. Terms like “clean coal” are not accidental. While many prominent politicians such as Barack Obama and Mitt Romney have advocated for carbon capture and storage technology, environmentalists such as Dan Becker, director of the Sierra Club's Global Warming and Energy Program, would contend that “there is no such thing as clean coal and there never will be. It's an oxymoron” . In the fast food industry, European McDonald’s shed its iconic red backdrop for a more environmentally conscious green in order “to clarify [their] responsibility for the preservation of natural resources” .

It is in the best interest of these companies to uphold an image that aligns with society's values. Aerospace engineering professor, David Akin, of the University of Maryland said: “A bad design with a good presentation is doomed eventually. A good design with a bad presentation is doomed immediately.” This not only applies to spacecraft designs, but also to companies and public relations. Determining the efficacy of greenwashing and public relations within the energy industry requires further investigation, but it seems unlikely that company executives attempt to mislead consumers as some sadistic ploy--though, it’s not impossible. It is much more likely that they are afraid of the ramifications of not upholding the values or expectations of its consumer base. Despite these efforts, consumers, infrastructure, and industry are not quite ready to ditch oil, and further analysis is needed to determine just how important public relations are for oil companies when so much of the world still relies heavily on oil as an energy source.