Aug 18 2012

Cynical Social Responsibility (CSR)

In Search of Transparency in the Energy Industry;

Industry Says Public is “Illiterate,” “Insurgency”

Is Spectra Energy a Benchmark?

When the energy industry touts its Corporate Social Responsibility (CSR), an acquaintance says this really translates to Cynical Social Responsibility as a more accurate reflection of industry behavior.

For example, ExxonMobil CEO Rex Tillerson calls the public “illiterate.”1  Range Resources and Anadarko Petroleum managers are on record recommending the use of military psyops personnel to deal with “an insurgency,” referring to landowners with the temerity – and perhaps the ‘illiteracy’ – to challenge industry operations.2

On the other side of the industry’s mouth, Spectra Energy CEO Greg Ebel talks of the importance of transparency in order to win public support.  “We need to maintain that [transparency] because the public’s criticism of us has been pretty significant these days,” Ebel told an energy conference, according to the Houston Chronicle.3

‘Pretty Significant’ Public Criticism

Yet Ebel and Spectra Energy are among many energy companies that decline to respond to questions from stakeholders, including property owners who are impacted by the company’s operations.  An energy reporter recently contacted this writer because Spectra Energy was not forthcoming in response to his questions.

Such behavior is embedded in energy industry culture.

The Goose Creek school district in Baytown, Texas, is about 25 miles from Spectra Energy’s Houston headquarters.  The district took the highly unusual action of shutting down an elementary school and a second building due to fears regarding a “leak or rupture” from nearby “aging pipeline corridors.”

The school board summarized its decision as follows (emphasis added):

The closing of the school and West Town complex follows a risk-analysis study of the two sites situated between two aging pipeline corridors.  The risk-analysis study commissioned by the district concluded that should an incident – such as a leak or rupture – occur to a pipeline near the school or complex, there is a potential that students and/or staff could be injured or worse.“ 4

The Goose Creek school district’s risk-analysis study mentioned Spectra Energy’s 55-year-old, 30-inch pipeline by name – the only one to be specifically identified.4

When I contacted the company to ask what additional maintenance it might take with its aging gas pipeline; whether it believed nearby homeowners were at risk; and whether Spectra Energy cooperated with the risk-analysis study – the company declined to answer saying, “it would no longer be appropriate to respond to your correspondence.” 4   

This is a company whose execs publicly state:  “The safety and reliability of our pipelines is ‘mission critical’ for Spectra Energy.  Safety is our franchise.  It’s what we ‘do.’”5

But when the moment of truth comes, it is “no longer appropriate to respond.”

The two buildings were shut down and abandoned at the end of the school year in 2009.  In 2011, a “For Sale” sign went up.  Recently, I contacted the school district to get an update.

Pete Côté, Executive Director of Support Services and Special Projects for the Goose Creek CISD (Consolidated Independent School District), replied.

As it turns out, the second building (West Town Center) is still for sale at an appraised value of $3.6 million; and on August 13, the school board approved a contract for the demolition of the elementary school, expected to be completed by October of this year.

Mr. Côté notes (emphasis added):  “As to the status of the aging pipelines running through the property, since we do not own or operate these pipelines we have little leverage to address this issue.  We’ve asked the Rail Road Commission to look at the issue and have been told the lines are currently in compliance w/ their requirements.”

Exposed bypass valve which is part of an "aging pipeline corridor" next to abandoned elementary school and second building in Goose Creek school district.

Meanwhile, Spectra Energy states on its website (emphasis added):

“We recognize that our stakeholders want to understand how we make decisions, manage our operations and hold ourselves accountable to our commitments and society’s expectations.”   Link:

And the company does that by not replying to questions about how it manages operations such as aging pipelines that lead a school district to shut down and abandon two buildings?

It gets worse.  Spectra Energy goes so far as to acknowledge the problem it and the industry has with public trust as one of four key “Challenges” it faces (emphasis added):

CEO Ebel and the industry ponder why energy industry credibility is declining as it shuffles the cards to replace principles with platitudes.

Spectra Energy’s ‘Corporate Shill’

For example, Ebel, a former Canadian government official, became CEO in 2009.6  Spectra Energy’s Wikipedia site reveals a company that cleanses and polishes its environmental record to the degree that Wiki editors criticized the “corporate shill” who continued to delete any effort at a fact-based, balanced report on the company’s performance record – failures as well as success.7

The “corporate shill” referred to by name is Jerry Hereden, a “Digital Web Specialist at Spectra Energy.”8

As the Wiki Revision History states:  “(Undid revision 381312289 by Jdhereden (talk) because the well-sourced, well written environmental section was deleted by a corporate shill.)9

Among his tasks is to shrink the public record on the company’s adverse environmental and community impacts and inflate the image of 48-year-old CEO Ebel.

CEO Ego – Size Matters

The result is amusing.  Spectra Energy’s Wiki website runs about 1,300 words.  Nearly half that is devoted to Ebel’s image rather than company operations.  We learn about Ebel’s “Career,” “Leadership” and, especially, his “Thought Leadership” which describes his many media appearances.

Is this another celebrity CEO in aspiration?

Ironically, the section on CEO Ebel dwarfs his company’s section on its Environmental Record – which could be twice as long if it included a balanced performance record which we’d be happy to supply.  Anything to help the corporate shills.

Since we mentioned ExxonMobil’s CEO Rex Tillerson at the beginning of this, perhaps we should compare its Wikipedia site which runs two sentences about Tillerson.  If size matters to Mr. Ebel – the size of the executive bio emphasizes the wrong values unless the company is committed to Cynical Social Responsibility.

Motley Fool on Spectra Energy

On the subject of value, The Motley Fool (TMF) ran a piece on “insider ownership” earlier this year, written by Contributor Dan Newman.  It reviews Spectra Energy and four other companies.

Insider ownership refers to how much company management is “personally invested” in the company.  Newman’s chart shows that Spectra Energy execs own far less than one percent of company stock.

According to TMF Contributor Newman (emphasis added):

“All of Spectra’s directors and executives own about 0.2% of shares (   ….  

“CEO Ebel owns 127k shares, and is required to own 200k within 5 years of becoming CEO (I think that’ll be 2013). That makes his position worth about $4m, whereas he got paid $6.8m in 2010. Not the best ratio, I agree.”

Motley Fool link:

‘All Hat & No Cattle’

To borrow a western phrase, Cynical Social Responsibility is an illustration of “all hat and no cattle” – big talk, no substance.   Energy industry execs talk and talk about the decline in public trust.  But they do not do what they say they will do in terms of their much touted principles of transparency, accountability and integrity.

Instead, they trade principles for platitudes.  The energy industry created its own decline in public trust.  Now they will live with the consequences – from investors, communities, property owners.  Not even ExxonMobil has enough money to buy trust.  And yes, Spectra Energy is a benchmark – of what not to do.

Links & Resources

1 Transcript of CEO Rex Tillerson’s Speech to the Council on Foreign Relations – “The New North American Energy Paradigm,” June 27, 2012:

2 “Oil Executive:  Military-Style ‘Psy Ops’ Experience Applied,” November 8, 2011, CNBC by Emon Javers –

The CNBC coverage includes audio links for the comments made by Mr. Pitzarella of Range Resources and Mr. Carmichael of Anadarko Petroleum.

3 “Energy leaders urge transparency to win public support” by Zain Shauk and Simone Sebastian, March 8, 2012, Houston Chronicle at this link:

4 Pipeline Fears Shut SchoolSpectra Energy Watch, March 2, 2011 – In addition to background information on the shutdown and abandonment of two buildings by the Goose Creek school district, the risk-analysis study is available as a downloadable pdf file at this link:

5 Spectra Energy Responds to Natural Gas Pipeline Concerns – Group VP Bill Yardley’s statement in The Jersey City Independent at this link:

6 Spectra Energy CEO Ebel’s biography from the corporate website – pdf file:  More_on_Greg

7 Spectra Energy Wikipedia

8 Jerry Hereden, Digital Web Specialist at Spectra Energy – public profile at LinkedIn:

9 Spectra Energy:  Revision history – Wikipedia – See note dated Sept. 6, 2010, which reads:  “(Undid revision 381312289 by Jdhereden (talk) because the well-sourced, well written environmental section was deleted by a corporate shill.)”  Link:

NOTE:  This article is cross-posted on the Accountability Central website at this link:   Accountability Central is part of the Governance & Accountability Institute, Inc.


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