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Coverage of energy that moves beyond polarized arguments and emotional debate to explore the points of tension, the tradeoffs and opportunities, and the very human consequences of energy policy, production, use and innovation.Inside Energy is a collaboration of seven public media outlets in the nation's energy epicenter: Colorado, Wyoming and North Dakota.

Clashes In Colorado, Elsewhere Hone Oil Industry's Focus On Social License

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Jim Hill
/
KUNC
A drilling rig at night near houses outside of Mead, Colo., pictured in August 2012.

As the oil and gas industry navigates this latest energy boom, it's facing a new and sometimes fraught relationship with the American public.

On the front lines are people like Alex Hohmann, a 30-something, fresh-faced engineer, currently holding the title of Stakeholder Relations Manager for Anadarko Petroleum. Previously, he designed systems to efficiently tap oil reservoirs, but now he's responsible for the much squishier task of getting neighbors' blessings for Anadarko's drilling projects in Northern Colorado.

"It's tantamount to Relationship 101," Hohmann explained.

Part of Alex Hohmann's job is talking to neighbors before drilling happens, fielding phone calls about bright lights and loud trucks 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," Hohmann said.

That may not sound revolutionary, 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 communities in places from Texas to New York suggest, that's no longer the case.

Hohmann said 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," he said.

Social license is a technical term coined two decades ago by Jim Cooney, then an executive at one of Canada's largest mining companies. He 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 a 1997 audience at a meeting at the World Bank.

"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," Cooney said.

The term caught on.

Now it's common parlance in the international mining sector. Banks ask for a social license plan before issuing loans, mining companies talk about strategies for acquiring social license and academics write papers about how to know when you have it.

Acceptance of the idea didn't come easily though, according to Cooney. He remembered being at an industry conference when an executive from the world's largest mining company stood up to share his thoughts on the concept.

"He says, 'It tastes terrible, it sticks in my throat but I figure I've got to swallow it for my own good,'" Cooney said. "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 some are taking steps in that direction. Earlier this year the American Petroleum Institute issued its first ever community engagement guidelines.

"The more you communicate, the more transparent you are, the more open you are to having those conversations, the better off everyone will be," said David Miller, the group's director of standards.

Not everyone is on board with that message though. Behind closed doors, some in industry are talking a different game. At a June 2014 meeting in Colorado Springs 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," Political Consultant Richard Berman told them.

That's a far cry from Relationship 101. Jim Cooney, the guy who coined social license, points to a cultural problem.

"The perception has been that society needs them more than they need social approval or anything from society," Cooney said.

As oil and gas moves 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.

Inside Energy is a public media collaboration, based in Colorado, Wyoming and North Dakota, focusing on the energy industry and its impacts.

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