U.S. Public Evenly Split Over Hydraulic Fracturing

---

Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--If hydraulic fracturing was a football game, it would be halftime and the score would be tied, according to a recent survey from Gallup (Washington, D.C.). That poll's tie score perfectly reflects the industry's performance on hydraulic fracturing ballot initiatives last November, when it won four contests and lost four others. But the Oil & Gas Industry appears poised for a strong second half, as shown by continued stakeholder outreach campaigns and the advancement of bills in Texas and Florida prohibiting bans on hydraulic fracturing and increased spending on consumer outreach.

Those legislative actions in Texas and Florida follow two metaphorical game-changing plays in the first half: New York State banning hydraulic fracturing and the Department of the Interior (Washington, D.C.) enacting new regulations for hydraulic fracturing on federal lands. For more on those issues, see December 23, 2014, article - New York Becomes First State to Ban Hydraulic Fracturing, and April 10, 2015, article - DOI Rule on Hydraulic Fracturing on Federal Lands Widely Criticized. And observers are keeping a close eye on Colorado, where earlier this year the governor's blue-ribbon panel failed to make legislative recommendations to address contentious land-use and local-control issues swirling around hydraulic fracturing, opening the door to a potential resumption of controversial voter initiatives to limit or ban that practice.

Hydraulic fracturing has evenly divided the American public, with 40% in favor, 40% opposed and 19% undecided, according to a telephone survey Gallup conducted this past March. The margin of sampling error is ±4 percentage points at the 95% confidence level. The Gallup survey did not define hydraulic fracturing, list its pros and cons, or ask respondents whether they have followed the issue. So while the results showed an evenly divided public, there may be some question as to how well respondents really understand what hydraulic fracturing entails.

Attitudes about hydraulic fracturing mirrored today's sharply divided political environment. A solid majority of Republicans (66%) in the Gallup poll said they supported fracking, while 20% of Republicans said they opposed it. On the Democratic side, 54% said they opposed the practice while 26% said they supported it. In addition, 44% of independents said they opposed hydraulic fracturing while only 35% said they favored it. Among independents, 21% said they had no opinion.

Older Americans tended to support hydraulic fracturing while younger adults were more inclined to oppose it. Among those aged 65 and older, a slim majority--52%--said they supported fracking. But only 32% of respondents aged 18-29 support the practice. The gaps narrowed for middle-aged respondents: those aged 30 to 49 slightly opposed hydraulic fracturing, while those aged 50-64 slightly favored it.

The Gallup poll also shed some light on the views of those who identify themselves as environmentalists. Of those who said they were "active participants" in the environmental movement, 24% said they supported hydraulic fracturing. Among those who say they are "sympathetic" to the goals of environmental groups, 30% support fracking. And for those who consider themselves as "neutral or unsympathetic" to environmental organizations, 57% support the practice.

In public comments, oil and gas executives have acknowledged they need to do a better job connecting with the public and reassuring it that hydraulic fracturing is a safe practice that has been done millions of times over the last 60 years.

Speaking at the North American Prospect Expo (NAPE) conference in Denver last December, Charles "Chuck" Davidson, chairman of Noble Energy Incorporated (NYSE:NBL) (Oklahoma City, Oklahoma), summed up the outreach challenge facing companies involved in extracting hydrocarbons: "In the November election, across the nation there were eight ballot measures to prohibit or significantly curtail hydraulic fracturing. Four of those measures passed. I'm not comfortable with a loss rate of 50%."

"We were slow to pick up on the public's concern about safety," he continued. "What we have found over the last year, is that transparency is critical" if producers are going to be successful in stakeholder outreach. "The winners will be companies that are transparent and proactive in engaging stakeholders. There is a continually growing environmental challenge to development of unconventional oil & gas reserves. Left unmet, those challenges could have a significant long-term impact on unconventional energy development." For more on this issue, see January 9, 2015, article - Oil & Gas Industry Bats .500 in Defeating Four Anti-Hydraulic Fracturing Measures.

In comments at industry conferences, executives from Anadarko Petroleum Corporation (NYSE:APC) (The Woodlands, Texas), Range Resources Corporation (NYSE:RRC) (Fort Worth, Texas) and Encana Corporation (NYSE:ECA) (Calgary, Alberta), among others, have made similar comments. Last August, Doug Suttles, president and chief executive of Encana, told an oil and gas conference in Denver, "We can no longer exist in the shadows. Our industry needs a long-term view of the importance of energy education. It can be uncomfortable. Our industry is very technical, with a lot of engineers and MBAs. But we have to get comfortable dealing with emotional issues" raised by hydraulic fracturing, like safe air, safe water and quality of life.

"The days of backroom deals, brokered in clouds of cigar smoke, are long gone," Suttles continued. "Markets are more transparent these days, and collaboration is important to figure out solutions." For more on this, see August 11, 2014, article - Billions of Dollars at Risk if Oil & Gas Industry Can't Do a Better Job Telling its Story.

The Oil & Gas Industry has been stepping up its communications and outreach on hydraulic fracturing, accentuating the economic benefits and environmental safety of the practice. Coloradans for Responsible Energy Development (CRED) (Denver, Colorado) continues its TV ad campaign featuring "soccer moms," farmers and suburbanites attesting to the environmental safety of hydraulic fracturing. Other ads highlight Colorado's toughest-in-the-nation regulation of the industry. CRED also sponsors a quarterly insert on oil and gas drilling and hydraulic fracturing in The Denver Post. Across the country, the Marcellus Shale Coalition (Pittsburgh, Pennsylvania) is an active informational resource on oil and gas development, environmental issues and the economic benefits of oil and gas produced by hydraulic fracturing.

But industry insiders wonder if all this outreach will be enough to allay the public's concern about hydraulic fracturing and oil & gas drilling. "There's an old saying that you can never have too many friends," said Jesus Davis, Industrial Info's vice president of research for the Oil & Gas Production, Pipelines and Terminals industries. "This definitely applies to the Oil & Gas Industry. The entire industry could be hurt if one operator slips on a banana peel."

"People are very concerned about oil being transported by rail," Davis continued, "and most of the gains the industry has made through its outreach and education could be wiped out by the next railcar accident. Something like that could turn a lot of the 'undecideds' in the Gallup poll into 'opponents,' making it even harder for the industry to allay public concerns and win stakeholder support."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.