A structural shift is under way in the energy industry, forcing natural gas and oil companies to rethink not only corporate strategies but also how they share their visions with the public and policymakers, a panel of energy executives said last week at the Offshore Technology Conference.

The energy industry has long gone through cyclical phases, with good times following slow periods, but this time a sharp turn toward renewables by the public and policymakers has shifted the marketplace, said Green Strategies Inc. President Roger Ballentine. The energy industry has to make communication a priority, said Ballentine.

“There’s a tremendous disconnect, or at least a lot of opinions, about how to do a proper energy policy,” he said. The energy industry would like the shift to be cyclical, but Ballentine said “very big” structural changes are under way already. “One of the great divides right now is the question of whether what we’re experiencing at this moment is structural or cyclical in energy…I think it’s structural.”

Ballentine, who teaches energy and climate policy at Harvard Law School, is a senior fellow at the Progressive Policy Institute in Washington, DC. He previously served as chairman of the White House Climate Change Task Force under President Clinton. Earlier this year Ballentine was named to the International Advisory Council of the Department of Energy’s National Renewable Energy Laboratory.

Ballentine believes that as the world becomes more attuned to issues such as clean air, clean water, energy security, climate change and resource conservation, business opportunities will grow by developing products and services consistent with these values. And in the future the private sector will be key in solving energy and environmental challenges, he said.

A “top priority” for the oil and gas industry is to be a “truth teller” and public educator, said Ballentine. “The fundamental shift won’t be possible” unless the public and policymakers understand what’s at stake. “Our overwhelming…dependence on petroleum is an economic, security and environmental cancer…and the American people need straight talk about the realities of the world oil market and the realities of geology…’Drill, baby, drill’ is not a solution.”

Ballentine also believes that energy companies’ climate policies and energy policies have to be “locked at the hip.” The “falsehood that good climate policy and good energy policy are in conflict needs to be debunked.”

American Petroleum Institute (API) President Jack Gerard told the audience that the public doesn’t have “good” facts about oil and gas.

“Once we get back to the facts, we can get back to a reality-based discussion,” Gerard said. By using new media such as social networking sites like Facebook.com, Twitter and text messaging API is keeping its members in the loop and educating the public, he said.

Marvin Odum, president of U.S.-based Shell Oil Co., said “rhetoric is seriously getting in the way of policy discussions on energy.” He said too little has been done to clear the air on what it will actually take to move away from foreign sources of energy. Even under the most rosy scenarios, said Odum, the world in 2050 still will be using more fossil fuels than it is today (see related story).

“And if we’re serious…there needs to be a price put on carbon,” said Odum. “Energy will cost more,” he said, and the public has to be ready to pay the price.

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