Hill+Knowlton Strategies

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.

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.

Forgot to mention on our January energy round-up that we have welcomed a new colleague to our office in Houston, none other than former Bloomberg Bureau Chief Kimberley Jordan.

Kimberley joins as a Vice-President in our energy practice after more than 17 years in journalism and said:

“I am delighted that my energy knowledge and journalism background can provide clients with valuable insights that will keep them informed and prepared regarding policy decisions and industry shifts.”

Here’s hoping we can have her come and guest blog for the Energy & Industry blog very soon.

Speaking of which we will try to have Glen Hodgson’s view on the Heads of State Summit in Brussels tomorrow. The agenda was set to focus on energy, although Egypt is bound to come up.

Amid concerns that energy companies are enjoying widening profit margins at the expense of their customers, Ofgem has announced that it will launch a review into the retail energy market.

With British Gas, Scottish and Southern Energy, and Scottish power all announcing price hikes in recent weeks, resentment has been growing as many home owners struggle in a difficult economic climate.

This Tweet sums up the general feeling nicely:

While many have welcomed Ofgem’s decision, there has also been significant scepticism in terms of what the review will mean in reality. In truth, this is not the first time that the market has been investigated in this manner, and as a spokesperson for Energy UK said today:

“The review is the latest in a long line of investigations into the energy market in recent years and no previous investigation has found anything to concern the competition authorities.”

While Sara Vaughan, head of energy policy at Eon, today heralded the beginning of a new era of ‘interactive relationships’ between energy companies and their customers, consumer groups are more sceptical.

As Adam Scorer of Consumer Watchdog pointedly stated, energy companiues “do not feel the hot breath of competition on their necks”. With the market closed to new entrants as a result of the dominance of the ‘big six’, market structure rather than conspiracy and cartels seem to be to blame for consumers’ current predicament.

If this is the case, then Ofgem’s investigation will merely provide lip service to the public’s bitterness, and could ultimately prove a further irritation rather than a solution. Watch this space.

Saw a very interesting presentation yesterday by Brendan Hodgson, SVP digital from our Ottawa office about the BP spill and the implications for communicators in light of the social media effect.

The numbers are staggering (5+ million tweets). The scale of the communications response appears to be unprecedented and of course this is a function of the scale of interest from a wide range of stakeholders (not to mention the scale of the incident itself). However, one thing that is as yet to be fully quantified is the scale of impact both in reputational and commercial terms.

Social media undoubtedly puts companies dealing with crises under greater scrutiny, demands greater transparency, requires greater resources and provides a permanent testimony to an organisation’s successes and failures in handling the crisis. The question is what will be the ultimate affect of social media on people’s behaviours and attitudes – will they stop using a product as a result? In this instance probably not, but in the case of a product that is less essential the answer could be quite different. I know this is something that Brendan and the team are keen to look at further. 

I also know Brendan has shared his findings with clients already and I hope this is something we can organise for our clients in the not too distant future. Watch this space . . .

‘It’s the same old Lib Dem conference, except this year it feels … different’.

Those were the words of David Grossman as he recorded footage for Newsnight following Nick Clegg’s speech to the party faithful yesterday. He’s right.

Despite significant losses in recent opinion polls, this year’s conference in Liverpool has attracted more people than ever before – 6000 are said to have descended on the city this week. Largely though, the increase in numbers is a product of a dramatic rise in business and media interest rather than an inflated number of party members.

Sure, the bearded, sandal-wearing loyalists remain, but they have been diluted by a mass of suited young corporate types. Meanwhile, paparazzi swooped on Nick and Miriam Clegg in a manner that would have been quite unheard of six months ago. As ordinary members make their way through new airport-style security, they seem a little uneasy that their annual get together has been gatecrashed.

Still, they’ve got bigger fish to fry. As is well documented, Lib Dem activists are increasingly concerned that their leader has jumped into bed with the Tories, with many grumbling that Clegg, a centrist ‘Orange book’ Liberal, has become disconnected with the left-leaning mainstream.

Yesterday morning, The Guardian’s Patrick Wintour argued that, in order to proclaim this year’s conference a success, Clegg needed to do two things. He must reassure the party that liberalism is not being crushed by the ‘juggernaught of Conservatism’ within Government, said Wintour, all the while restating the cause for the deficit programme in a convincing manner.

Not easy. And it didn’t get any easier. By early afternoon the party’s leadership had been defeated in a conference vote over their support for ‘free schools’ on the grounds that a currently ‘unfair’ school system would be made more unequal under coalition plans, worsening educational outcomes for the majority of children.

The stage was set for Clegg, and, despite an outright refusal to criticise his Conservative coalition partners, an upbeat and defiant speech saw the leader leave the main auditorium at Liverpool’s ACC to a rapturous standing ovation. ‘Stick with us’ he said, urging the party to ‘hold our nerve’ and play the long game. A list of liberal achievements in power precluded a staunch defence of coalition plans to cut the deficit immediately. The 2010s, he said, would not be a return to the 1980s. This time around, public sector cuts will be made on a practical rather than an ideological basis, and will be intertwined with a sense of ‘fairness’.

Some, undoubtedly, will remain sceptical, especially with the argument over the timing of cuts (given the leader’s u-turn on the timing of deficit-reduction measures). Nonetheless, Clegg did succeed in generating a feeling of euphoria with the faithful that has not been seen since the lofty days of ‘Cleggmania’ during the general election campaign. While his words will be painted by many outside the party as desperate pleading, to a membership that has waited so long to taste power, they were received as a welcome unifying battlecry.

Clegg departed the conference last night as the UN beckoned. But the show will go on. Today, the Energy and Climate Change secretary, Chris Huhne, will take to the stage as he looks to showcase the coalition’s record on green issues. A range of energy-related fringe events are set to provide the perfect backdrop.

With environmental activism the apple of many-a-Lib Dem eye, there is sure to be close scrutiny. Nuclear will undoubtedly remain the elephant in the room. While the party remain opposed to the development of nuclear power stations, the coalition is encouraging private investors to drive nuclear new-build despite a reluctance to subsidise investors with public funding.

Speaking on a panel that included EDF CEO Vincent de Rivaz, Huhne last night reiterated that he ‘is not theologically opposed to nuclear’. But many in the party are. Huhne will have to tread carefully on this thorny issue, all the while considering the pro-nuclear views of his Conservative colleagues in Government. Having rattled a few Tory feathers already this week by expressing his opposition to a like-for-like replacement for Trident, he is likely to want to play down the nuclear issue as much as possible.

Elsewhere, members are concerned that the party is not doing enough to push green issues in Government. With next year’s local elections drawing ever closer, local party stalwarts are pushing for a radical environmental campaigning platform. Yesterday the rank and file pushed through an amendment to a policy motion on ‘green taxation’ that set a target of securing no less than 10% of its taxes from environmental revenue by 2015. Ministers had urged voting members to pass the motion with no amendment.

Huhne’s challenge, then, is to build on Clegg’s speech yesterday, showcasing a radical liberal commitment to green issues that sets the party apart from the ‘Conservative juggernaught’. For a party still basking in their first taste of power, this is likely to be enough to quieten dissenting voices over the deficit-programme for now. Nevertheless, as rhetoric takes a back seat to tangible cuts over the next twelve months, next year’s conference may be a different story.

So following Larry Hagman’s (Dallas’ JR Ewing) switch to alternative energy with American solar panel company, SolarWorld, it seems solar is the hot topic of the summer!

Everywhere I look this week in the media there is a story on solar and its benefits, but is it really a friend for the future or will it turn and bite us?

A neighbour of mine has had solar panels fitted for a while now and seems quite content with them. I can see the benefit of using such a powerful natural resource as a source of power but would I put solar panels on my roof? Not likely to be fair and I’m sure I’m not alone in this view, although reports from BBC show that more than 2,000 homeowners have already had solar panels installed and are using electricity for free.

Now it seems the government has chosen solar as its new ‘thing’ and is creating cash incentives for people who generate their own power. As we saw with the car scrappage scheme, cash incentives seem to work in this country so I’m sure we’ll see solar panels popping up left, right and centre in the near future. But as they say, you don’t get anything for free!

Whilst we’re all basking in the warm glow that solar panels will give us free electricity and reduce our reliance on fossil fuels, folks across the other side of the pond are asking questions about the long-term environmental impact of disposing of solar panels. Erica Gies’ piece on The Guardian’s website discusses what impact making and disposing of solar panels has on the planet and our health and it’s quite an eye-opener. I hadn’t realised that solar modules contained so many potentially dangerous materials.

I guess there’s two ways of looking at this – we either embrace solar full on, knowing that there are risks but that solutions for recycling are being investigated and that we need to have alternative fuels for the future or we wait, see how solar progresses in the next few years and hope that manufacturers find safer ways to make and dispose of panels and probably get left behind the rest of the world. Whichever way you go, it looks like solar is here to stay – all we need now is the sun!

I stumbled across a neat little initiative while perusing BusinessGreen during my lunch break – edible curtains.  Yes.  Not technically curtains, mind you, which was a little disappointing but I am still impressed.

Kyocera, the Japanese tech group, is pioneering the initiative at 20 manufacturing facilities in Japan, Thailand and Brazil. They basically created what I think we’d call “hedges” around their buildings to block direct sunlight in a bid to not only lessen the need for air conditioning, but provide a health snack for employees to nibble on.  They’ll also be used in the company cafeterias.  Nifty little energy saving initiative, I say.

Employees harvesting the curtains

For the sceptics out there, Kyocera has confirmed that the curtains lower wall temperatures, and “decrease temperature by as much as 15 degrees C”. Covering roughly 32,750 square feet (3,043 square meters), the curtains are expected to absorb an estimated 23,481 pounds of carbon dioxide emissions – the same amount that can be absorbed by 761 cedar trees.

The kind folk at Kyocera have set up a website where you can find more information on the curtains, as well as helpful tips on how readers can grow their own. I recommend checking out the “What is a Green Curtain” section for some cute (always important) graphics. 

Unfortunately, I don’t think we’re in the best location to grow our own edible curtain at 20 Soho Square, and my repeated requests to build a roof terrace where we could grow our own garden have been denied (something about health and safety…).  But if we could, I think I’d like to grow flowers so we could stop paying to have them brought in.  And some cherry tomatoes.

What would you grow?