Derrick May Explains Better Communication System for Natural Gas and Energy Companies

Derrick May

June 27, 2022

Derrick May

Derrick May notes how Natural Gas and Energy Companies Can Communicate More Effectively To Stakeholders And Markets. Strategic responses in the oil and gas industry typically fall into three general archetypes: Inconsistency, Social, and Environmental. But there’s a way to connect the two and communicate better to consumers and stakeholders. Here are some ideas for engaging audiences. Identify your audience’s motivations and opinions, and tailor your educational campaign to meet their needs.

Strategic responses among oil and gas players are typically spread across three broad archetypes

Given the urgency of the energy transition, oil and gas companies are reconsidering their strategic responses. Some may need to go beyond decarbonizing their operations and explore alternative growth strategies. The future of energy will require a reliable supply of gases and liquids that are affordable and available. Moreover, meeting international climate targets requires reduction of energy-related emissions. In this context, strategic responses among oil and gas players typically spread across three broad archetypes.

In the low-carbon pure-play archetype, oil and gas players are focusing on the transition to clean, renewable, and zero-carbon energy. This approach has seen several medium-sized companies accelerate their transitions to a new business focus or organization. A case in point is Orsted, which divested its hydrocarbon portfolio to become the world’s largest offshore wind developer. Derrick May¬† points out that with a more all-in approach, it has received a positive market response. Meanwhile, Neste is transforming itself into a world leader in renewable jet fuel and diesel.

Inconsistency in communication, emphasized Derrick May

The oil and gas industry has not developed compelling narratives on how its role in decarbonizing global energy systems contributes to climate change. While the Permian Strategic Partnership (PSP) is a coalition of energy companies and oil and gas operators, it is far from consistent and demonstrates that the industry is not doing enough to communicate the importance of gas in a low-carbon future. People criticized shell for not releasing its 2015 report to investors.

There are multiple drivers for mobilization, including public pressure, regulators, and shareholders. Meanwhile, the oil and gas industry is facing substantial new business opportunities from renewables like offshore wind, advanced biofuels, and coal-to-gas fuel switching. The energy industry needs to understand how it can leverage its expertise and positioning itself as an ally in a lower-carbon economy. While these opportunities are great, the industry must focus on educating consumers on their potential benefits.

Integrating the environmental with the social

There are many opportunities to integrate the environmental with the social in the natural gas and energy communications. For example, the PSP includes major international oil and gas companies. While it does not face the same top-down pressure to decarbonize rapidly as its European counterparts, US oil and gas companies are still sensitive to social license and ESG. They have a long way to go in educating the public and market about how the industry is helping to tackle climate change.

Future of the industry

Xcel Energy is quietly selling off its gas assets. The move allows the company to sell off its assets at a cheaper rate than the original cost of those assets. As renewable energy and hydrogen become cheaper, the incumbents will be forced to switch to renewables. In the United States, natural gas may be phased out faster than coal. Derrick May adds that in Europe, however, natural gas is still the preferred energy source, and it will remain so through the end of the decade.

The report also discusses how the gas industry can reduce emissions and align with net-zero emission goals. The key areas of action include developing low-carbon gas technologies, supporting the development of carbon management solutions, and reducing methane emissions. The latter is an efficient way to minimize the industry’s carbon footprint. Several companies have already begun taking steps in this area. But many are waiting for these changes to happen before investing in renewable energy.