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Public Perceptions Regarding the Oil and NaturalGas Industry
Presented by
Jean Statler
October 24, 2006
Presented at: IPAA Annual Meeting
2
Sept. 11 Attack
Op Iraqi Freedom
Election Day ‘04
26%
48%
45%
64%
General Mood of the Nation
3
Energy Strategic Framework
Peace Of Mind
Personal Security
National Pride
Mobility&Transport-ation
Daily
Use
EconomicContri-bution
GetThingsDone
Domestic
Supply/Access
DIVERSITY OF SUPPLIES
NationalSecurity
QualityOf Life
FutureGenerations
Better Lifestyle, Dependable (Reliable), Protection,Domestic Production & Jobs, Technology
Rational
Emotional
SafeFuture/
4
Current Public Opinion of the Oil and Natural Gas Industry
5
Summary of Findings
Even though the industry faced many challenges over the past year(hurricanes, gas prices, earnings, State of the Union Address) mostmetrics have stabilized or slightly improved
Reliability is still seen as a key industry strength—but erosion isoccurring at the attribute level
–Industry creates jobs
–Industry develops new and useful products
–Narrowing of the gap between benefits of the industry’s products vs. risks
Build on key equities of reliability, technology and products to reinforcestrengths and inoculate against further corrosion
–Connect with emotions of security (national, energy, future generations)
When gas prices and earnings are lower -- environmental concernsreturn to the forefront of negative industry perceptions
6
Industry Favorability
Oil and Natural Gas
Electric Utility
Automotive
Plastics
Coal
Nuclear Power
7
IndustryFavorability
Industry Favorability, Price at the Pump
Average Priceof RegularGasoline
8
General Public: Favorability Determined By More Than Prices
Leadership Traits23%
Price
32%
Economic issues
13%
Corporate
governance
19%
Environment
8%
Efficient
4%
Government
cooperation
8%
Caring
5%
Reliable
11%
Leadership
traits
20%
2004
2005
n=2,000 General Public Tracking
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Perceived Benefits Continue to Outweigh Risks
RISKSRISKS
BENEFITSBENEFITS
High Tech, Innovative, Quality ofLife
Improved EnvironmentalPractices
Reliability and Mobility
Environmental Impact
Finite Supply
Corporate Trust
Military/National Security
Price
10
Perception of Leadership is Deteriorating
2002
COMPLETELY DISAGREE
RELIABLE = 7.5
DELIVERS ON PROMISES = 6.2
CREATIVE = 6.2
HONEST = 5.1
VISION OF THE FUTURE = 6.3
CARES ABOUT PEOPLE = 4.1
General Public
2006
COMPLETELY
AGREE
RELIABLE = 6.4
DELIVERS ON PROMISES = 5.1
CREATIVE = 5.0
VISION OF THE FUTURE = 4.9
CARES ABOUT PEOPLE = 5.7
HONEST = 3.9
10
1
5
11
Most Core Strengths are Still Salient
CORE STRENGTHS 2006
•Jobs
•Advanced Technology
•Products
•Role in our Nation’s MilitarySecurity
•Prosperous and SecureEconomy
CORE STRENGTHS 2005
•Jobs
•Advanced Technology
•Products
•Role in our Nation’s MilitarySecurity
12
Vulnerabilities in Rational Components
KEY VULNERABILITES
•Profit Margins
•Price
• Stability
• Fair prices
• Affordability
• Allows you to save money
•Amount of Information Received
•Global Warming
•Clean Environment
• Health
• Air Quality
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Conclusions: Views Entrenched but Hope Exists
Benefits of the industry’s products continue to outweighrisks
Actual knowledge of industry issues and practicesimproves perceptions
Key themes that drive reputation:
Contribution to economy and quality of life
Benefits of the industry’s products
Environmental stewardship
Technology
Increased efficiency
Energy security plan