Two years ago, Alex Hohmann’s job didn’t exist.
“I’m stakeholder relations manager for Anadarko Petroleum.”
Hohmann is a 30-something, fresh-faced engineer. In previous jobs, he designed systems to more efficiently tap oil reservoirs, but now, he’s responsible for a much squishier task -- getting neighbors’ blessings for Anadarko’s drilling projects in northern Colorado.
“It’s tantamount to Relationship 101.”
Like…. talking to neighbors before drilling happens, fielding their phone calls about bright lights and loud trucks while it’s happening and coming up with solutions that allow the company to profit, without ruining the lives of people who live nearby.
“You have to say what you’re going to do, and you then have do what you say you’re going to do and you have to be willing to listen to the other person’s perspective.
That may not sound like a revolutionary statement, but for the oil industry it is. For most of oil history in this country, securing mineral rights and having government permits in hand were considered all the permission companies needed. But as friction with community in places from Texas to New York suggest, that’s no longer the case. And Hohmann says companies ignore that current reality at their own financial peril.
“Those minerals go undeveloped -- not for lack of the legal license, but for lack of growing, earning, maintaining that social license.”
Social license. That’s a technical term -- one that was coined two decades ago by Jim Cooney, who was then an executive at one of Canada’s largest mining companies...
“The year was 1997, at a meeting at the World Bank... ”
And Cooney was racking his brain for a concept to describe why projects from Peru to Angola were getting delayed and shut down by protests. The companies lacked “social license,” he told the audience.
“Proposed the term almost as a black box, to indicate that there was something else out there that wasn’t covered by your government permits.”
The term caught on. Today, it’s common parlance in the international mining sector. and in fact most project can’t be financed without proof of social license. But Cooney says acceptance of the idea didn’t come easily. Like the time a representative from one of the world’s largest mining companies shared his thoughts on social license.
“He says, ‘It tastes terrible, it sticks in my throat but I figure I’ve got to swallow it for my own good.’ I like to say it was with that degree of enthusiasm that the mining industry crossed the line and adopted sustainable development.”
All signs point to social license being no less of a bitter pill for the oil and gas industry, although it is taking baby steps in that direction. Earlier this year the American Petroleum Institute issued its first ever community engagement guidelines. David Miller is the group’s director of standards.
“The more you communicate, the more transparent you are, the more open you are to having those conversations, the better off everyone will be.”
But not everyone is on board with that message. Behind closed doors, some in industry are talking a different game. At a recent meeting of oil and gas executives, a lobbyist was secretly taped telling the crowd to prepare themselves for “endless war…” against the opposition
“Fear and anger have to be part of this campaign…”
If you couldn’t hear that, he said fear and anger have to be part of the campaign -- and he pushed for smear tactics against critics…. That’s a far cry from Relationship 101. Jim Cooney, the guy who coined the term social license, says it’s a cultural problem.
“The perception has been that society needs them more than they need social approval or anything from society.”
But as oil and gas move in closer and closer to communities and frustration builds,that attitude may need to change... if the industry doesn’t want to get shut out of its lucrative drilling prospects.
SOQ
