Politics, policy, and the President’s speech

Criticism of the President’s speech last night ranged from the lack of specific policy asks to the aggressive tone he took in describing what BP would be forced to do.  But those elements are what made the speech a short term winner – and possibly the only viable course of action.

Though it breaks a personal moratorium on referencing Ronald Reagan, the purpose of this speech should have been similar to the 1986 speech after the Challenger disaster.  That speech sought to restore confidence in American ingenuity, which had just taken a very dazzling and public hit.

Obama’s speech had a similar goal – channel and focus people’s emotions.  In his case, he wanted to empathize with Gulf residents and all Americans who will feel the environmental brunt of a company’s mistake.  The policy ideas he put forward are window dressing for the bigger message – he feels your pain, and he’s going to inflict some of it on BP through a relief fund that the oil company will fund but not direct.   (Something that would have been a good idea for BP to set up in the first place.)

Could he come out of this swinging and missing?  Could BP challenge the seizure of their assets in court – and, conceivably, win?  Perhaps, but after waiting 57 days to make this statement, it’s the best message the President has.

Plus, if BP weasels out of the bill some how, the President will still have a chance to make them the bad guy.  Just because a James Bond villain jumps in an escape pod and eludes capture doesn’t make Bond’s effort any less heroic.  It just means that Obama will have to find new and creative ways to hold BP accountable – something like tax credits for owners of local BP gas stations  owners who want to change  their affiliation.

It may not be good policy, but it’s good politics.  As the old saying goes, when you see a mob coming with pitchforks and torches, either grab a torch and join the crowd or start running in another direction.

BP slogs, Exxon blogs

This week, Exxon Mobil launched Perspectives, a blog about “issues, policies, technologies, and trends” surrounding energy development.  Yes, that includes oil, and yes, they kick off by talking about the mess in the Gulf of Mexico.

No, Lionel Osbourne is not a featured blogger.

BP has received the lion’s share of the public scorn since the spill, but other companies remain vulnerable to regulations and increased taxes.  It isn’t an immediate challenge, but Exxon Mobil didn’t wait for the problem to come to them.

It would have been easier, in the short term, for Exxon Mobil to act like the accomplice of the kid who gets punished for a grade school food fight – sit on their hands, let BP continue to be yelled at by authority figures, and keep quiet hoping none of the outrage falls on you.  The problem with that strategy is that, eventually, the story will not be about BP’s specific failings but the failings – and potential failings – of the industry as a whole.

Of course the blog is biased and slanted, but Exxon Mobil makes no effort to hide its involvement.  Perspectives is clearly branded as the official Exxon Mobil company line – take it for what its worth.  And doing that now will help Exxon Mobil’s credibility (at least somewhat) in future discussions about what their obligations should be.  Plus they’ll likely to have some thoughts on what BP’s obligations are too.


Responding to BP’s response

After yesterday’s crisis management advice for BP, it seems fair to look at what the world’s current least-favorite oil company has been up to online in its response to the oil spill in the Gulf of Mexico.

BP devoted a section their company website as a central repository of information about their cleanup efforts.  The pages are very fact-heavy, along with two video responses from BP officials and several pages of pictures.  Essentially, BP’s branded response to the crisis is an online press kit.  While the breadth of information is impressive, this is an exclusively one-way channel.

There are, however, other venues.  BP is one of the driving forces behind DeepWaterHorizonResponse.com, plus an associated Facebook page and Twitter feed. As one might expect, the Facebook page is the best of the group; Deep Water Horizon officials respond to comments with measured, polite answers to legitimate questions; and harsh critics are not censored. It helps that the initiative is not branded as coming solely from BP, thus diffusing some strong emotions folks likely feel toward the company.

It would be nice to see more from the efforts on the ground beyond a few pictures on all of BP’s online properties, something that could evolve as the campaign matures.  It’s a decent enough first step for BP, but it will only work if it’s the first step of many.

Big Oil’s worst nightmare is, ironically, big oil

Questions may fly about who will pay how much to clean up the latest catastrophe in the Gulf of Mexico, but the answers affect more than British Petroleum’s cash reserves.  The accident which claimed the lives of rig workers and threatens the coastal environment’s short term health comes just months after President Obama made a big show of opening up new areas to offshore energy exploration.  From a business angle, at risk is the future of offshore oil drilling for BP and any other company that relies on the United States government for exploration rights.  In the coming weeks, the drumbeat to cap the wells and bring the oil derricks back to terra firma will only grow louder, unless BP and their colleagues take the right actions now.

The Action

Eventually, there will probably be a rational explanation of why BP wasn’t entirely responsible for all the economic damage, but as the current debate over financial reform legislation demonstrates, rational explanations will do little to convince populist politicians. In addition to directly funding clean-up efforts, BP would be wise to work through local governments to administer small business development programs to help industries affected by the spill get back on their feet – and possibly even exceed their previous production.

Working through local and state governments is especially key.  Criticisms of BP are most likely to come from those voices, but if they are satisfied with relief efforts, they could be powerful allies.

Incidentally, BP should not act alone in this.  Energy companies have been asking to drill for resources in the waters off the U.S. shoreline for a long time, and the most compelling argument against them has come to realization.  While BP’s visibility and leadership is vital, other companies have a dog in this fight, too.

Messages and Messengers

There are two important themes BP and the industry must advance.  First, they must highlight what they are doing to rebuild – the programs they put in place as well as the results.  The second (which involves the whole industry, is to re-affirm the value of offshore drilling.  In both cases, the people delivering the messages matter as much as the messages themselves.

Toyota’s handling of the safety issues which plagued them earlier this year offers some good advice to follow.  Toyota recognized that not only was the perception of their cars damaged, but leaked emails and memos damaged the credibility of their top executives.  Americans don’t trust CEOs, so  Toyota turned to the two groups that could offer credible, positive messages: the engineers and assembly line workers who make the cars, and consumers.

This is where online communication – and especially online video – will be important.  A video channel featuring commentary from government officials and environmental workers will offer a transparent and compelling chronicle of the relief efforts. And oil industry workers – from those on the rigs to those in the refineries – offer an important insight as well.  For them, offshore drilling is as much about putting food on the table as it is about lowering gas prices, and they are now the best spokespersons for the industry.

The reality is that we live in a time where often, government picks winners and losers in the business world – a proposition that puts BP and their colleagues at risk.  Further, since they are hoping to tap reserves in areas controlled by the federal government, The oil industry will not soon shed their image as a huge, greedy, quasi-government entity.  Americans are traditionally suspect of power.  The best thing they could do is admit some level of responsibility, work to rebuild, and – most important – invite the American people and media in to see the details.

Drinking our milkshake

In case you missed it, the Congressional ban on offshore oil and gas drilling disappeared about 15 hours ago. Democrats decided to let the ban expire last week.

It was shrewd. There will be no policy change – given all the regulatory and procedural hoops companies who want to drill will have to jump through, it could be years before the first drill bit pierces the ground. And, as many Democrats are hoping, that will be long after the Obama administration works with larger Democrat majorities in the next Congress to “fix” offshore guidelines.