Oil Doesn't Want Focus on Big Profit
Wednesday, October 26, 2005
Gigantic oil companies generally do not enjoy the best PR.
Pick your poison: Oil companies have caused tanker spills, proposed drilling into the Arctic wildlife ranges, crafted ties to shady nations and meddled in the affairs of others, and produced products that pollute.
Now, even as high gasoline prices continue to anger motorists and aggravate financial problems at General Motors Corp. and Ford Motor Co., the oil companies have begun to report record quarterly profit. Yesterday, British energy giant BP PLC reported a $6.53 billion third-quarter profit, up from $4.87 billion in the same period last year. And tomorrow, analysts expect Exxon Mobil Corp. to show that it earned nearly $9 billion over the past three months -- the largest corporate quarterly profit ever.
Grumbling already has begun on Capitol Hill: Last month, one senator proposed a windfall-profit tax on oil conglomerates, and yesterday, House Republicans warned energy companies against price gouging.
To deflect the damage, the energy industry is relying on an ad campaign that was escalating even before hurricanes Katrina and Rita blitzed Gulf Coast petroleum refineries. The print and television ads are designed to educate consumers and lawmakers with a "we're all in this together" tone.
In the pages of The Washington Post, for example, according to the paper's ad executives, BP has taken out seven large issue ads so far this year, compared with zero through the same time last year. Exxon Mobil has had 19 so far this year, compared with 12 last year. For Chevron Corp., it's 17 ads so far this year, compared with six last year. And the industry's trade group, the American Petroleum Institute, has purchased seven ads in The Post so far this year, compared with none last year.
Chevron and Exxon Mobil increased their ad spending in the third quarter of this year at the New York Times, the newspaper company reported in its earnings call last week.
"You still have 100 hours of press time on any oil spill versus a tiny blurb or nothing at all if a company spends hundreds of millions on pollution control," said Lyle Brinker, an analyst for the John S. Herold Inc. energy research firm. "Sometimes, they just throw up their hands. The best thing they can do is keep the debate focused on educating the public."
Red Cavaney, president of the American Petroleum Institute, said the ads partially are designed to correct no-longer-true misperceptions about his industry. For instance, he said, even though 90 percent of the Gulf Coast drilling platforms and refineries were hit by either Katrina or Rita, there were no oil spills.
The industry's ads range from simple conservation messages to those that attempt to re-brand the oil companies as something else.
An American Petroleum Institute ad implores consumers to turn down thermostats, clean furnace filters, and weatherstrip windows and doors.
Full-page ads from Chevron ominously warn: "It took us 125 years to use the first trillion barrels of oil. We'll use the next trillion in 30."