No More Business As Usual For Oil And Gas Companies
( The public is becoming more skeptical of companies that produce fossil fuels, including oil, gas and coal, a trend seen most clearly in young people. It isn’t so much that the students disapproved of fossil fuels. But strong majorities said they would consider how a company handled environmental issues as part of their calculations about working in the industry)
There may not be a national consensus on how, or even if, the United States should deal with a changing climate, a state of uncertainty exacerbated by President Trump’s decision in 2017 that the country would not participate in the 2015 Paris Accord on climate change mitigation.
However, it is increasingly clear that the conversation is not over. The public is becoming more skeptical of companies that produce fossil fuels, including oil, gas and coal, a trend seen most clearly in young people. That has implications not just for action to mitigate climate change but also for the industry’s ability to recruit workers to replace retiring baby boomers.
A study commissioned by the advocacy group Union of Concerned Scientists and released last week found that 57% of Americans said oil, gas and coal companies bear at least some responsibility for the damages caused by global warming. They also said the companies should pay for at least a portion of the damage caused by carbon pollution, from rising sea levels to extreme weather events.
The pollsters said that even in Texas, 56% of residents support holding the companies accountable for the costs of adaptation.
That wasn’t a surprise. Energy companies, and specifically oil and gas companies, remain a major force in the Houston economy. Yet when the Hobby School of Public Affairs at the University of Houston, working with the Environmental Defense Fund, surveyed UH students in energy-related disciplines, they told us a company’s environmental stewardship will play a role in their decisions about employment.
Specifically, we found:
A majority of respondents said a company’s environmental stewardship practices and its corporate social responsibility program will factor into their decisions about working in the oil and gas industry.
There were no differences in attitudes toward corporate social responsibility and environmental stewardship between students in technical fields, such as petroleum engineering, and those in social science, business and the humanities.
A majority of respondents said the United States should participate in the Paris Accords.
A majority said the United States should use more renewable energy and fewer fossil fuels in the future.
“The company’s environmental footprint is a major factor in where I’m looking for employment,” one student, an industrial engineering major, said. “I’m looking for energy-related jobs, whether that be renewables or offshore oil and gas. Not all fossil fuels are terrible at this moment, but we need to be looking toward the future.”
Despite efforts to diversify its economy, Houston is still known as the “energy capital” of the world, home to about 5,000 energy companies. Many people either work in the industry or know someone who does. But the industry is undergoing a transformation known as the Great Crew Change, an industry-wide gap in middle-level managers stemming from the oil bust of the 1980s. Older workers are retiring, and younger workers must decide whether to take their place.
UH, situated in the heart of Houston, is the training ground for a large proportion of the industry’s workforce. Although our findings may not generalize to the entire U.S. population, they do provide insights into how the next generation of energy sector employees think about corporate social responsibility and environmental stewardship.
The survey relied upon three complementary strategies: 1) It directly asked students about their attitudes toward corporate social responsibility and environmental stewardship; 2) Respondents were randomly assigned to one of three informational conditions, allowing us to identify how information about environmental practices affects perceptions of environmental issues and initiatives; and 3) It used an empirical strategy that presented respondents with a choice of two job hypothetical job profiles that varied by pay scale, energy sub-industry and environmental stewardship. Through analysis, that allowed us to determine to what extent respondents were willing to trade income for a firm’s reputation as a leader in environmental stewardship.
What we found, coupled with the public opinion poll released by the Union of Concerned Scientists, suggests many of the issues facing the industry – both in recruiting and retaining younger workers, as well as in its interactions with society at large – are rooted in concerns about the climate.
We found strong support for the idea that global warming is real (88.3%) and caused mostly by humans (80.1%). Almost three out of four said the U.S. should participate in the Paris climate agreement. And about 94% said the U.S. should use renewable sources of energy – wind, solar and geothermal – much more or somewhat more than we do today. About as many said we should rely less on fossil fuels than we currently do.
More than 82% said they are “moderately,” “very” or “extremely” concerned about the environment.
It isn’t so much that the students disapproved of fossil fuels. But strong majorities said they would consider how a company handled environmental issues as part of their calculations about working in the industry . Almost 57% said their top priority would be the company’s attitude toward environmental responsibility; almost two out of three said they would take a lower salary or lesser role at a company with strong environmental policies.
Companies are aware of these attitudes, and most of the major oil companies support a carbon tax or some other mechanism to offset the damages caused by CO2 and other harmful emissions. They also have begun to ramp up both environmental programs and the broader corporate social responsibility efforts, both for international and domestic operations.
They are investing in technology, both to expand access to renewable energy and to reduce the environmental impacts associated with oil, natural gas and other fossil fuels.
Environmental concerns demand that, but so does the future workforce.
Pablo Pinto is an Associate Professor of Public Policy and Director of the Center for Public Policy at the University of Houston’s Hobby School of Public Affairs. He is also the co-editor of the journal Economics & Politics. Pinto holds an M.A. from Aoyama Gakuin University in Japan, and a Ph.D. in Political Science and International Affairs from the University of California, San Diego. He also received a Law Degree from Universidad Nacional de La Plata, Argentina.
Prior to joining the University of Houston in 2014, Pinto was a member of the faculty of Columbia University. He taught at the Escuela Nacional de Gobierno in his native Argentina, and the Universidad Nacional de La Plata, where he founded and directed the Department for Asia-Pacific Studies. He also worked as Chief Counsel for Toyota Argentina.
Ryan Kennedy is Associate Professor of Political Science at the University of Houston (UH). He is also the founding director of the Center for International and Comparative Studies (CICS) at UH. He received his Ph.D. in Political Science from The Ohio State University in 2008. He was also a Visiting Scholar for a year at Northeastern University and Harvard University in Computational Social Science. Ryan is interested in issues of energy access, sustainability, technology, and governance. His previous work has been published in Science, the American Political Science Review and the Journal of Politics, among others. At UH, Ryan teaches classes on international energy politics, statistics, and democratization.
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