North American oil and gas operators should be on a mission to educate and engage society about what they do because if they fail to do so, there are dangers of more stringent regulations and/or a groundswell of opposition, two industry leaders said Tuesday in Denver.

Petrie Partners LLC Chairman Tom Petrie and Encana Corp. CEO Doug Suttles opened the business session for this week’s Rocky Mountain Energy Summit, annually sponsored by the Colorado Oil & Gas Association. The two executives shared some of their wisdom through decades in the industry, and offered some advice to the standing-room-only crowd.

Petrie, previously vice chairman of Bank of America Merrill Lynch, attended the U.S. Military Academy at West Point and served in the Army before becoming a financial energy analyst. He co-founded energy investment banking firm Petrie Parkman & Co., which merged with Merrill Lynch in December 2006.

Petrie penned some of his insight on the energy industry in his recent book, Following Oil: Four Decades of Cycle-Testing Experiences and What They Foretell About U.S. Energy Independence.”

“One lesson that I’ve learned is that it is important to let markets work and to do so in their own time and their own pace,” Petrie told the audience. “It is incumbent on all of us…to understand the value of educating the rest of society, the rest of the business community, about what our industry does…In the ’70s we failed to do that” and regulations were excessive. “Our industry is too complex commercially and technically to micromanage with regulatory oversight. We have to have faith in the markets…and rely on self-correction.”

That’s not to say that regulations aren’t needed. However, “it’s important to embrace the powerful regenerative forces to appropriate and incentivize capital…A decade ago, we still were hearing about that issue of peak oil…and lo and behold, that’s had quite a change…”

The impetus for change in part was caused by industry consolidation, according to Petrie. Around “three dozen” of the largest operators in business in 1980 “combined and combined and combined such that at the beginning of the last decade, we were down to one dozen…”

That led entrepreneurs to form companies from scratch, through private capital and initial public offerings. It also led to a leap in “intellectual capital” because the small operators were “highly motivated to go after oil and gas.” One such entrepreneur was George Mitchell, whose leadership at Mitchell Energy & Development Corp. led to the earliest successful unconventional drilling technologies.

“Oil’s found in the minds of people,” said Petrie. “It’s quite clearly in people today.”

Put another way, he said, “what we are dealing with today is a real recognition that human activity unlocks resources…especially when we are talking about unconventionals.” The implications of those achievements has had some positive and some negative consequences. “But they all present opportunities.”

No longer is North America locked in a battle to secure oil and gas supplies from other nations. With its prowess as an energy producer, U.S. relationships regarding energy security now are “not on a diplomatic agreement” as they became after World War II. The new agreements “offer implications for us in Colorado, the rest of the Rockies and certainly, the rest of the United States…

“We may well be on the verge of meaningful exports of natural gas…of liquids from the United States,” said Petrie. While there are arguments to keep the energy produced in the country, exports would ensure the United States may “rebalance our markets and make sure we stay relevant.”

It’s “always darkest before the dawn, which is…a cliche. That was the mindset in 2004, 2005, when we were focused on peak oil…Then we started looking at unlocking hydrocarbons effectively from source rock…”

Suttles, a former BP plc executive who took the helm at Encana last year, said he issues facing the energy industry may be captured under two “E’s” — education and engagement.

“In many ways in my reading of the history of the industry, two big factors that have driven the industry at a macro level were geopolitics and technology,” as Petrie said. However, “Many people didn’t realize that the last decade was the most unique decade. It really grew in the growth in demand, putting real pressure on supply and pushing the price higher…

“Just like in peak oil, less than a decade ago we were talking about building LNG [liquefied natural gas] import terminals. Along comes unconventionals and the shale revolution…and the impact of technology once again is coming in.”

The Former Soviet Union coming apart and the Berlin Wall coming down, among other upheavals, have opened a “great big portion of the planet…to industry.”

Technological revolution at the same time opened up reservoirs in the deepwaters of the offshore, in the Arctic and “clearly in shales,” said Suttles.

“Really, the big macro events are never predicted ahead of time…” Leaders work “in the moment, and some things can look like uncertainty, look like risks…Some people choose to act, and that’s where strategic leadership steps in, even though at the time it feels very, very uncomfortable.”

Those risks were upon Suttles when he came aboard at Encana, struggling at the time to shift its gassy portfolio to achieve better returns in liquids/oil plays.

“We set about shaping a strategy in which in many ways, we could only work from where we started from…Facts are your friends. When you find that foundation, and it’s supported by facts, then you can formulate your strategy. We needed to be a position for our company to be successful in an uncertain world.” Suttles’ goal was for Encana to be “successful in a variety of circumstances.”

Two “key things” are important to achieving strategic leadership, said Suttles. The first is education. “The industry has to have a goal to raise education, not as a big public debate, but it has to go on for decades. It’s important for everyone in the world, and it’s important for industry.

“Secondly, we have to agree to engage, both with those who agree with us and more importantly, those who don’t.”

Speaking to a Colorado audience that has faced pushback from conservation groups and ballot initiatives to ban unconventional drilling, Suttles said, “We can solve things civilly before it goes to the ballot box” (see related story).