The FINANCIAL — Americans’ views of the oil and gas industry continue to improve, with 34% now saying they have a positive view of it. That is up 12 percentage points since 2012, and is one point lower than the 15-year high of 35% from 2003. Ratings have improved as the average price of gas in August has declined more than $1 per gallon since 2012.
Historically, there is a statistically strong, albeit imperfect, relationship between gas prices and Americans’ views of the oil and gas industry. From 2001 to 2003 — when the August price of a gallon of gasoline in the U.S. averaged around $2, adjusting for inflation — the percentage of Americans rating the industry positively was higher than the historical average of 23%. And views of the oil and gas industry have improved since 2012 as the price of gas has fallen.
Positive perceptions of the oil and gas industry fell to an all-time low of 15% in 2008, when gas prices averaged $4.09 per gallon. Americans’ ratings of the industry were also 15% in 2006 when gas was $3.43, a 40-cent increase from the prior year.
Americans’ perceptions of the oil and gas industry were fairly flat from 2009-2012, when gas prices were volatile, showing a steep drop in 2009 and then a sharp increase in 2011. During this time, the industry also dealt with negative fallout from the BP oil spill in the Gulf of Mexico, though this did not appear to affect the industry’s already low ratings.
The current results are based on Gallup’s annual Work and Education poll, conducted Aug. 5-9. Each August, Gallup asks Americans to say whether their views of 25 different business or industry sectors are positive, neutral or negative.
The recent improvement in Americans’ views of the oil and gas industry is notable because the industry typically has been one of the poorest-rated in Gallup’s list. It has had the lowest net-positive ratings, or statistically tied for the lowest, in 12 of the 15 years Gallup has conducted the survey, including every year from 2001 to 2010.
Even with the improved ratings in recent years, the oil and gas industry’s net rating in 2015 is -13, based on 34% positive ratings and 47% negative ratings, and oil and gas remains the second-lowest business or industry sector tested. Eighteen percent of Americans are neutral toward it.
Federal Government Now Worst Rated
The federal government is the lowest-rated industry or sector, as it has been now for three of the last five years, including 2011 and 2014. Twenty-five percent of Americans view the federal government positively and 54% negatively. It is the only industry or sector that currently has majority negative ratings.
In addition to the federal government and the oil and gas industry, four other industries have net negative ratings this year, including the pharmaceutical industry, the healthcare industry, the legal field and education. Except for education, Americans typically rate each of these industries more negatively than positively.
The computer industry tops the list, as it has every year except 2006, when it placed second to the restaurant industry. The restaurant industry is also typically rated positively, with a +50 score this year.
Some of the other positively rated industries are the Internet, grocery, farming and agriculture, travel, accounting and retail sectors.
Implications
Americans’ ratings of various industries have been responsive to events affecting the industries historically. One prominent example is the sharp decline in automobile industry ratings, as two of the Detroit Three U.S. automakers needed government bailouts to avoid going bankrupt during the recession, and the subsequent surge in ratings as the industry recovered. The accounting, banking and real estate industries have also seen their images suffer amid scandals or other problems facing each of them.
The oil and gas industry has suffered in the past when gas prices have risen, as well as when the industry was criticized for its record profits. But as gas prices have fallen, which helps consumers but not the industry or governments that rely on oil revenue, Americans’ views of the industry have brightened. Still, the oil and gas industry remains one of the more negatively rated industries, though it has relinquished its former status as the lowest-rated industry to the federal government.
Some economists expect to see crude oil prices continue to fall, which would mean gas prices would remain low for the foreseeable future, and may keep Americans’ views of the industry trending in a positive direction.
