Hill+Knowlton Strategies

So, it seems there will be an announcement tomorrow morning on whether the Energy Secretary Chris Huhne will be prosecuted. This bring to an end months of speculation over allegations that Huhne asked his former wife to take speeding points on his behalf.

Nick Clegg has already made it clear that if charged, Huhne will have to step down, prompting speculation on who will replace him on the energy and climate change brief. The quota of Liberal Democrat ministers will of course need to be maintained, narrowing it down somewhat. Junior business minister Ed Davey appears to be the front runner, with junior Foreign Office Minister Jeremy Browne and former Treasury Secretary David Laws also mentioned in passing.

The Coalition Government has been under fire recently for backsliding on environmental policy, with even key initiatives such as the Green Investment Bank, feed-in tariffs and the Green Deal falling victim to a strong Treasury keen to keep public spending to a minimum wherever possible.

Of the three contenders named above, two contributed to the Orange Book of 2004, widely regarded as the manifesto of the right wing of the Liberal Democrats. If tomorrow does mark the end of Chris Huhne’s cabinet career, all eyes will be on his successor for any hint that the ‘greenest government ever’ is not living up to its name…

Rob Foyle will be taking to the stage during September at the inaugural ‘Future Communications & PR for the Energy Sector 2011′ event at the Grange Hotel in London.

Joining a panel that will debate the question, ‘is the integration of corporate PR, marketing and political comms a reality?’, Rob will be joined by panelists from EDF Energy and Gazprom Marketing and Trading Ltd and other agencies that shall remain nameless.

Rob’s participation is yet to be announced by the organisers (you read it hear first!), but his experience of managing campaigns across the world on behalf of clients will help to provide an international flavour to his contributions to the discussion.

For more information about the event get in touch, clients receive a special rate to attend, so it’s worth it!

It has been an age since my last blog and on the energy front things have been busy. The Statoil campaign in the UK has kicked into gear, we’ve had the Electricity Market Reform, release of strategic oil reserves (good blog from Platts yesterday), increased retail energy prices in the UK and continued debate about the future of nuclear in different parts of the world.

In the world of media too things have changed. Of course we no longer have the News of the World on our newsstands, but we have a new social network to play with in Google+ and apparently there are already 10 million users (for those interested I’m at http://gplus.to/chrispratt). We also had the launch of the Huffington Post in the UK, and the subsequent debate in the journalist twittersphere about unpaid content and commentary.

Personally speaking the pace of things at work and at home (moving into new house) has precluded much else, but the train journey has allowed me to make a start on the new book by Tom Bergin , Spills and Spin, about BP’s Macondo spill and the changes at BP under Lord Browne and Tony Hayward, which according to Bergin had created an environment more comfortable with risk than perhaps an oil company should be. It’s an interesting perspective and I look forward to the week off next week that will allow me some time to finish the book.

I’m also looking forward to reading more about the fallout from the EMR. One thing is clear about the reforms and that is that energy prices will increase to foot the bill for the investment in our national infrastructure. What the bill will be and how much the average energy consumer will have to pay, nevermind the extent to which heavy industry can afford to stay in the UK, will be the subject of much debate as the Government starts to provide the clarity required to make the calculations. From a communications perspective therefore much remains to be done as consumer groups, businesses, energy companies and Government line up for what will be a time of challenging messages. Something to think about on the beach? Probably not, but maybe when I get back.

Today’s announcement by Vestas that it will be building its new 7 MW offshore wind turbine is being broadly trumpeted, particularly by Greenpeace and Friends of the Earth.

The company said the plan was reliant on market and regulatory certainty and public investment to reduce the risk of building a facility of such a size. In other words, Vestas needs both an order pipeline and government backing sufficient to move forward.

These are significant caveats. Ongoing efforts by the government to reform the electricity market could end up making the UK a less attractive location for wind farm developers than it has been to date. And just this week the Committee on Climate Change argued for nuclear over offshore wind as the more cost-effective way to decarbonise the economy.

Brandz today launched their annual Brandz 100 list of the top global brands by brand value. Unsurprisingly Apple topped the table this year, but there were some interesting changes further down the table. This was especially true for the energy industry where BP’s brand value suffered significantly as a result of the GOM spill and dropped below Brazil’s energy giant, Petrobras (who in the interests of transparency, we should add are a client).

The full report has been published and although the energy & industrials team at Hill & Knowlton UK didn’t make the final cut in this year’s commentary it’s still an interesting read. The FT has committed a special report to it as well and more articles are to follow the openers in today’s FT.

Petrobras’ phenomenal rise in brand value has been replicated by other emerging market brands as the solutions to the energy challenges the world faces are being met by new emerging market giants. It will be interesting to see also how the majors respond and whether ExxonMobil and Shell can continue to capitalise as BP fights back.

We’re told by the authors that Petrobras’ increase is in part because they have strong momentum, they have very positive investor sentiment (following their record-breaking IPO) and the country brand of Brazil is strong (especially with the forthcoming World Cup and Olympics). It will also be interesting to see how this sentiment weathers inflation and the pressures of growth, but as pressures go it’s not a bad one to have to tackle.

Our team in Brussels will next week play host to the Director General of the European Commission’s Energy DG, Philip Lowe. The event is organised in conjunction with the British Chamber of Commerce and will take place on 5th April. It comes at an interesting time for European policy makers and energy business leaders.

People wishing to register can do so here, or contact our team in Brussels.

On a related note, saw some great infographics by European energy statistics. The navigation can be a bit frustrating and there’s no sharing tabs for the beautiful stats, but it’s a great way to present the data in an easy to understand format.

While the Chancellor’s freeze on fuel duty is likely to grab the headlines, on deeper reflection this afternoon’s Budget announcement is indicative of the Coalition Government’s struggle to fulfil its goal of reducing emissions at the same time as it looks to squeeze spending.

With DECC and the Treasury having fought a running battle over the Green Investment Bank’s ability to raise funds, it looks – as had been anticipated – as though the Treasury has got its way. This will undoubtedly be viewed as a setback for Secretary of State for Energy and Climate Change Chris Huhne, and his Liberal Democrat colleagues.

So much for ducks quacking and banks borrowing eh?

Worries about rising energy prices are also behind the decision to slash the CCS Levy, while the Government has clearly taken note of the need to incentivise the Green Deal at a time when most consumers are more concerned with making ends meet than lowering their carbon footprint (a subject that Huhne spoke about at the launch of the CBI report ‘Making the Consumer Case for Low Carbon’ which was held at H&K 2 weeks ago)

In this context, green campaigners and investors in green technology look set to be disappointed. Many have already begun to argue that the carbon floor price will not drive investment into the more conceptual forms of clean energy or improved efficiency at the proposed level. Nuclear looks like the winner in this regard at the moment, but events in Japan may well put the brakes on the new build programme in the UK as they have elsewhere.

Ultimately for all those involved in the energy sector, whatever their sentiment towards today’s announcements, the 2011 Budget serves as a stark reminder of the difficulties that lie ahead for the Coalition in its quest to become ‘the greenest government ever’ in an age of austerity.

As the saying goes, ’Trust is hard to earn and easily lost’. Equally its value is hard to quantify until it is lost (see the impact of GOM on BP’s brand value), which can sometimes make it difficult to invest in.

However, just because something is difficult both to do and then to test, does not mean we shouldn’t do it. As David Prosser notes in The Independent this morning the big six power generators have earned themselves an ignominious reputation, being less trusted than banks at the moment. That should be seen as a problem that needs to be addressed, not as an inconvenient truth.

One of the things that Ofgem has suggested in its reforms is that the big six sell off 20% of their generating capacity to increase competition and this is where the lack of trust could become a serious business issue. Just because customers have shown a reticence to switch in the past does not mean that an organisation who is very effective at communicating with customers and winning their trust will not come along and start to take share from the big six operators in the future. PA Cover Ofgem Announcement

These firms have a plethora of communications and policy issues to overcome at the moment, but a good start would be to simplify customer propositions, provide greater clarity about their operations, explain and educate about complexities of their business and engage in a better dialogue with customers and prospects. The low-carbon energy challenge in particular is one that I think most people would happily be more active in addressing and new-nuclear must now engage with a much wider group of stakeholders than it has until now to avoid the NIMBY reaction of people after the disaster in Japan.

First things first will be some research to test what has impacted trust historically and what influences different stakeholders trust.

I’ll admit it. 

I didn’t want to go. 

Where, I hear you ask? 

Ecobuild. 

Nothing against sustainable construction, mind you.  It’s just I’m not a huge fan of the ExCeL centre, or – and I hate to say it – trade shows in general. 

But….

I was pleasantly surprised. Dare I say it, I even enjoyed myself.

This year’s event was HUGE.  Bigger than I anticipated, even though I did check out the website and peep some of the vendors sites before I went.  There were more than 1,300 exhibitors from the fields of design, construction and what Ecobuild calls “the built environment”.  Still not sure what that is. Seems a bit vague….but I think they mean people who sell and install things for inside your building…floors, toilets, plumbing, windows, etc.

So, why did I enjoy it?

1. I got to know a very cool company – REC Solar.

2.  I was thrilled to see what a huge presence solar was at the show.  Despite concerns around the government’s planned review of feed in tariff policy and what this could mean for the UK solar industry – all the big players were out in force. Go team.

It’s a solar bear…get it?!

3.  I got to get back in touch with my techie roots and play with phase change materials (PCMs for the uninitiated) – check out BASF and DuPont.  There was a great little demo centre called the Cool Workspace, which showed how PCMs can be used to create a more sustainable office environment by storing both heating and cooling, reducing the carbon footprint of buildings by up to 30%.

4.  The people. Yes, that old chestnut.  I was genuinely impressed with the huge range of people that were drawn in.  From the big corporate sales guys, to students, to apprentice builders, to eco-conscious consumers, to, er… models dressed as Canadian mounties (see below).  While most of the attendees were indeed more of the corporate ilk, it was refreshing to see that there was a noticeable representation from a huge range of people. 

As nice as it would be to preserve all the green space left in the world, that’s never going to happen.  Construction and physical development is a reality.  Even here on our little island, we’re expected to increase our population to from 61 million to 70 million in about 15 years.  Whether that growth is sustainable from a resources point of view or not is a different blog post, but that’s a lot of new housing, schools and hospitals. Let’s hope they’re built in a way that takes a lesson from Ecobuild.

Expanding unrest in the Middle East has jolted the oil market, sending crude to $119 a barrel since Egyptians first took to the streets in January. The oil market doesn’t like uncertainty, and nothing could be more uncertain than the volatility spreading to Libya, Africa’s third-largest oil supplier, and Tunisia. Some analysts are even concerned about Saudi Arabia.
Rising oil prices mean rising gasoline prices, which have surged to an average of about $3.13 a gallon at the pump in the U.S. This comes on the cusp of the summer driving season, when prices usually peak as Americans hit the roads.
Some analysts say oil could reach $220 a barrel if Libya and Algeria halt exports. The U.S. Energy Information Administration said Feb. 8 that the monthly average retail price for regular gasoline could exceed $3.50 a gallon during summer 2011. And that was before the Libyan situation developed.
What typically follows these price upticks is a round of Congressional hearings as indignant constituents’ wallets are squeezed.
Surging oil prices usually bring a fresh look at renewables too, so green energy companies should be prepared to seize the moment. Companies involved in alternative fuels such solar and wind can use this time of high oil prices to once again showcase their offerings.
This would also be an opportune time for oil companies to press for Gulf of Mexico drilling permits, long stymied by the ghost of Macondo.
Times of unrest often call for times of new beginnings.