SPE 134253 Public Perception of the Oil and Gas Industry: The Good, the Bad, and the Ugly Gene L. Theodori, Sam Houston State University, and Douglas Jackson-Smith, Utah State University Copyright 2010, Society of Petroleum Engineers This paper was prepared for presentation at the SPE Annual Technical Conference and Exhibition held in Florence, Italy, 19–22 September 2010. This paper was selected for presentation by an SPE program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper have not been reviewed by the Society of Petroleum Engineers and are subject to correction by the author(s). The material does not necessarily reflect any position of the Society of Petroleum Engineers, its officers, or members. Electronic reproduction, distribution, or storage of any part of this paper without the written consent of the Society of Petroleum Engineers is prohibited. Permission to reproduce in print is restricted to an abstract of not more than 300 words; illustrations may not be copied. The abstract must contain conspicuous acknowledgment of SPE copyright. Abstract Data collected in a general population survey from a random sample of individuals in Tarrant County, Texas, were used to empirically explore issues associated with public perception of the natural gas industry. In addition, the association of public perception of the energy industry with dependent measures such as individual-level actions that (a) may or may not have been taken and/or (b) may or may not be taken in response to the exploration and production of natural gas was investigated. Echoing findings from research in two neighboring Barnett Shale counties (Theodori 2009), it appears that members of the general public in Tarrant County distrust the intrusion of the gas industry and dislike certain potentially problematic social and/or environmental issues perceived to accompany development. Conversely, these same Tarrant County residents appreciate and view less negatively the economic and/or service-related benefits that tend to result from such development. Furthermore, the results of this study suggest that the social/environmental perceptual variable is a key factor to explaining past behaviors and predicting future behaviors taken in response to the exploration and production of natural gas. Possible implications of these findings for the energy industry are proposed. Introduction For the past nine years, the Gallup Organization has polled Americans on their views of more than 20 business and industry sectors in the country. The survey asks respondents to rate each business and industry sector in the United States on a five- point scale ranging from “very positive” to “very negative.” Between 2001 and 2009, the industries ranking near the top and bottom of the list remained fairly consistent. Either the computer industry or the restaurant industry topped the list as the most positively viewed industry sector each year (computer industry rated most favorably in 2001, 2002, 2003, 2004, 2008, and 2009; restaurant industry rated most favorably in 2005, 2006, and 2007) (Jones 2008, 2009; Newport 2007). Concurrently, with the exception of 2002, the oil and gas industry unfailingly ranked as the least positively viewed industry. In 2001, the year of Gallup’s initial poll on the images of various business and industry sectors, roughly 24% of respondents viewed the oil and gas industry in a positive manner (either “somewhat positive” or “very positive”). That percentage increased by one percentage point in 2002. In 2003, the oil and gas industry had its highest rating, with 35% of respondents viewing it in a positive manner. One year later, that percentage dropped to 21, and in 2005 it dropped to 20. The percentage of respondents who rated the oil and gas industry positively in 2006, 2007, and 2008 were 15, 19, and 15, respectively. According to the most recent Gallup data (as of August 2009), approximately one in every five respondents (21%) regarded the oil and gas industry in a positive light (Jones 2009). Over a span of numerous years now, the Gallup Organization and other national/international polling entities have produced extensive macro-level survey results on perceptual issues surrounding the oil and gas industry for the mass media (Bolsen and Cook 2008; Polling Report, Inc. 2009). Despite this vast knowledge on the perceptual issues surrounding the oil and gas industry, surprising little theoretical and/or empirical work has examined the effects of varying levels of public perception of the oil and gas industry on a dependent variable by incorporating public perception as the primary independent variable of interest. With the present research, we add to the scientific literature on public opinion of the energy industry. Specifically, public perception of the natural gas industry is investigated. Moreover, the association of public perception of the energy industry with dependent measures such as individual-level actions that (a) may or may not have been taken and/or (b) may or may not be taken in response to the exploration and production of natural gas is investigated.