Innovation

Why energy firms like Enbridge are hiring environmental activists

How veteran eco-warriors of the ’90s Clayoquot Sound protests are transforming the oilsands today

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Police carrying away a protester

Police arresting environmental protesters at Clayoquot Sound, August 9, 1993. (Wayne Leidenfrost/Vancouver Province/CP)

I still wanted to have one more job,” Linda Coady says. By which she means a job actually making something happen, instead of teaching or advising or writing research papers. The pioneering eco-conciliator was not ready to accept the mantle of éminence grise just yet. Her kids had left the nest; she could move if she had to. And she had come to see the issues around energy as the foremost challenge facing sustainability experts like herself. So when she got a call out of the blue from Karen Radford, executive vice-president of Enbridge—a lightning rod for environmental protest—she was ready.

Coady knows controversy. In the 1990s, as a junior vice-president for MacMillan Bloedel (later acquired by Weyerhaeuser), she was thrust into the epic battle over Clayoquot Sound on Vancouver Island, where more than 800 protesters were arrested in the summer of 1993. Improbably, she brokered a détente with environmental groups and First Nations that would become a template for later peace treaties over the Great Bear Rainforest and the boreal forest, and helped bring the War of the Woods to an end after some two decades of unrest.

Today, thanks to the work of Coady and others like her, Canada’s forest industry goes about its business largely without incident or interference from environmental non-governmental organizations (NGOs). In hiring Coady two years ago to fill its newly created chief sustainability officer position, Enbridge was acknowledging that the oilpatch might have something to learn from the forest industry about moving past environmental controversy and renewing its social licence.

It was a big leap, akin to step one in a 12-step program. “Change in large organizations, particularly ones that are profit maximizers…doesn’t come until people have exhausted all other options,” Coady said in a 2003 speech, 10 years after the Clayoquot confrontation (and while she was working at the World Wildlife Fund). For MacMillan Bloedel, the company had to consider the possibility that it was part of the problem, she said. “Things didn’t change until the company owned the problem and began to not completely give up on the politics of blame but understand that it had to do something about the problem and to change.”

Among the changes that came out of the forest industry’s discussions with its fiercest critics were ecosystem-based forest management and third-party certification of wood and paper products—compromises that offered a way out of the standoff. In practice, this meant more public land was set aside for conservation purposes and, in the areas still open to logging, cut blocks—those strategically shorn sections of forest seen in aerial photos—grew smaller. Standards were also raised for road building, which was a major contributor to landslides. Today, everything from two-by-fours to toilet paper comes with a certification stamp from bodies like the Forest Stewardship Council, a Germany-based endorsement agency started and still largely controlled by environmentalists.

Moreover, the localized land-use agreements at Clayoquot and the Great Bear Rainforest would lead to the more sweeping Canadian Boreal Forest Agreement signed in 2010, whereby 21 forest companies upped their forest management and harvesting practices in an area three times the size of the United Kingdom—stretching from B.C. to Newfoundland—in return for a moratorium on campaigns from nine environmental NGOs. Canadian Geographic magazine described it as “the largest conservation agreement ever signed, anywhere.”

Coady is just one of several veterans from both sides of the War of the Woods who are now bringing their experience to the new environmental battleground: energy. “On the higher-level stuff, I know I bring a lot of my history forward,” says Alex Ferguson, a forester by training and former executive with Slocan Forest Products and Canfor who now serves as vice-president of policy and performance for the Canadian Association of Petroleum Producers (CAPP). He says he learned to step outside his own professional mindset to solve problems.

“I end up talking to a lot of engineer types. Their world is perfect and organized and elegantly complex,” Ferguson says. But many of the obstacles they face today require different skills around incorporating unfamiliar social and cultural perspectives into their decision-making. His advice to people on both sides of environmental conflicts? “Don’t just launch into what you think is the answer, because it’s probably the wrong problem you’re solving.”

It’s fair to say the oilpatch in 2015 is more enlightened than the forest industry was in 1995, when the language around sustainability and corporate social responsibility (CSR) hadn’t been invented yet, says Coady. “I have learned since I came to Calgary that you have to be careful here about what you draw from the B.C. experience,” she cautions. Companies there were focused on compliance with regulations that were sadly outdated.

Yet like the forest industry then, the oilpatch today has problems with international acceptance of its products and resistance at home to many of the things it wants to do and used to do happily, without a peep of protest—building pipelines being chief among them. Both industries have found themselves the subjects of unflattering photo spreads in National Geographic and editorials in the New York Times. Oversimplification of complex issues in the public sphere fuels polarization, Coady says, which leads to a kind of worst case scenerio where each side has the capacity to stop the other from getting what it wants, but neither can achieve its own goals.

Even so, there are lessons to be drawn from how forest companies found their way out of this stalemate, some of which can be directly applied to the oilpatch:

Meet the enemy

At the height of the Clayoquot standoff, MacMillan Bloedel employed public relations campaigns, marshalled exhaustive research from its foresters and scientists, and fought its opponents in court—and none of it was working. Then it hired Coady out of an industry association to try something new: to actually talk to environmental and aboriginal opponents. That was the beginning of the solution, Coady says. Energy and pipeline companies will ultimately have to do the same thing, adds Glen Hodgson, vice-president and chief economist for the Conference Board of Canada. “I hope they recognize that to be seen as a credible industry within the North American context, they’ve got to find a way to sit down and talk to stakeholders—not lecture people, not do end runs around them by lobbying to government,” he says. “I’m not sure we’re there yet.”

Find shared goals

“Even if we disagreed on 10 points, we would work on one or two,” Coady says, remembering her first engagement with NGOs and First Nations. “That was enough to start shifting things.” Finding agreement, of course, required both parties to compromise their positions. The companies had to agree they couldn’t simply log as they had in the past; the greens had to accept that economic activity—including logging—was a necessary part of any solution. In the course of that negotiation, the nuances among the positions of various stakeholders become apparent, Coady says. “Eventually there’s a process of elimination. The groups that aren’t comfortable putting their positions to the side fall off. And then the centre begins to form.” That is to say, you’re not going to please everyone, so don’t try. Attempt instead to build a consensus that the broader majority can go along with.

Realize that markets matter

The most effective tactic environmental groups used to frustrate forest companies was to take the fight to their customers. The forest industry could ignore other stakeholders, but not The Home Depot or Victoria’s Secret, which opted to find other suppliers rather than buy tainted Canadian lumber and paper for its catalogues. Environmental groups are employing the same strategy, in a less direct way, on the oilpatch, by raising public opposition to pipelines and low-carbon fuel standards for refineries in California and Europe. As a result of this and other factors, Coady says, the oil and gas industry is already being forced to reorient itself: “In CSR, market-based innovation and shifts are key. The Canadian oilpatch is going from a supply-driven approach to a market-centred approach for energy products and services.”

Don’t wait for government

The forest industry adopted third-party certification of its products without governments getting involved at all; it was an understanding between companies, their customers and NGOs. The Canadian Energy Pipeline Association and CAPP have been developing certification programs too, but their credibility is being called into question, coming as they do from industry bodies. Could the energy industry adopt an independent benchmark similar to California’s Low Carbon Fuel Standard? (In 2011, Cenovus Energy let on that output from two of its in situ oilsands projects could meet the standard, which mandates that crude oil imported to the state have lower wells-to-wheels emissions than the average of all crudes sold in the U.S.) “Yes, I think that’s feasible,” says George Hoberg, a political scientist at the University of British Columbia who specializes in environmental conflict. However, product certification is unlikely to satisfy environmental NGOs, he says, which have their sights set on rapid decarbonization of the economy.

Expect the unexpected

It wasn’t just agreements that brought peace to the forests. “Something else happened to intervene and break the political stalemate,” says Hoberg. The mountain pine beetle outbreak—a natural phenomenon linked to climate change that killed huge swaths of B.C. forests—served to mute public opposition to logging after 2000. Similarly, the deciding factor in whether and how much oilsands production continues to grow may not be battles over Keystone XL and Northern Gateway so much as a protracted period of low oil prices, the decline in the cost of renewable energy or the adoption of low-carbon policies by governments worldwide. One hard truth realized in the aftermath of the War of the Woods is that the forest industry is smaller and less significant to the Canadian economy than it once was. Likewise for the oilsands, Hoberg predicts: “It’s going to be harder to compete.”

Perhaps the key take-away from the War of the Woods is that words are not enough. You have to be prepared to change the way you operate. “One reason the B.C. forest industry was successful is they changed significantly,” says Hoberg. “The oil sector is trying to address the problem through words and marketing but not through significantly changed behaviour.”

Unfortunately, it’s hard to see the energy industry reaching the same kind of truce with the environmental movement that the forest industry did, for a number of reasons. First, oil and gas is much bigger and its issues more complex. Whereas the forest industry and the NGOs allied against it were largely based in Canada, the oilpatch and its opposition are global in nature, so getting every player to the table is much more difficult. Second, it’s easier to compromise over forest practices than it is to meet halfway on many energy projects. “Pipelines are a yes or no thing,” notes Hoberg.

A third important distinction lies in the fact that by changing their harvesting practices, forest companies’ products could be made acceptable to environmentalists. The same is not true for oil, observes Merran Smith, a leading campaigner for the Great Bear Rainforest who now heads up Clean Energy Canada, an NGO focused on hastening the country’s transition to renewable energy. In the context of the Group of Seven industrialized countries’ recently announced intention to phase out fossil fuels entirely by 2100, she says, “This product cannot be made acceptable. It is the problem.” The only way oil and gas firms can regain their social licence in the long term, she argues, is to become diversified energy companies and move toward renewable assets. (Unfortunately for shareholders, that does not promise an attractive return on their investment to date in existing oil and gas reserves.)

As they digest multiple shocks—a worldwide oil glut, new emissions rules and anticipated royalty increases under Alberta’s new NDP government—oil and gas companies’ attention will likely be focused elsewhere. And while these more urgent challenges are largely cyclical in nature, the issue of social licence will not go away. Though a sweeping peace treaty with the environmental movement seems unlikely, the War of the Woods proves there are ways to lower the temperature of the conflict and regain the public’s trust.

So far Coady’s work at Enbridge has been about conducting outreach around specific areas such as water stewardship and updating climate change policies. To date, Enbridge has been a recognized exemplar of environmental reporting and disclosure. “My focus now is on deeper integration,” she says—turning sustainability principles agreed upon by company management into the basis for corporate decision-making. She says her role at the pipeline company is more senior than the one she had at MacMillan Bloedel: “I advise executives and the board.” (Still, she’s not listed as part of the executive team on the company’s investor site.)

Notwithstanding the lessons of the War of the Woods, there’s a danger that things for the energy industry have to get worse before they get better, the Conference Board’s Hodgson warns. “That would be unfortunate because it would hit every Canadian in the pocketbook.” Many oil workers still talk of the need to “educate” the Canadian public on “energy literacy,” as if they simply know better.

The forest industry and the B.C. government tried this approach in the 1990s, trotting out their foresters and other experts at every opportunity, to no avail. Successive Alberta premiers (with the notable exception of the current one) have invited critics to visit the oilsands on fact-finding tours. Yet none of the premiers have bothered to visit, for example, B.C.’s north coast. None could put a value on the economic impact of the cruise ship industry, and the commercial and sport fisheries there that are threatened by crude oil exports. (Here’s a hint: It’s several times that of pipeline construction and operations.) The education, in other words, has to go both ways.

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