Explainer thread: SOCIAL LICENCE is mentioned when people talk about fossil fuel companies. This thread explains what it is, why it has value, and how it works. I’ll use Equinor’s drilling project in The Great Australian Bight as an example.

WHAT is it: To have social licence means the community that will be affected by your business are giving you the green light. Equinor had the green light from the federal government, but not from the people of Australia. They had a licence to operate, but no social licence.

Social licence is said to be held by a company, but it is really something held in the collective mind of the affected communities. It does not have to be support, it is enough that the community is neutral or not opposed to the drilling.

WHY is it important to fossil fuel companies: Not having a social licence is more expensive than having one. Defending your operation is expensive. Equinor had to pay their way into newspapers via @TRYReklame ads, their lobbyists wrote opinion pieces, ran “public meetings” etc.

HOW DO YOU GET ONE: Fossil fuel companies will do what they can leave a positive impression with communities. One example: Equinor, like BP and Chevron before them, sponsored a local Oyster Festival to buy goodwill and social licence from the community.

Equinor did one major social license fail when going into The Bight. They thought a green light from the fed. govt. would count positively towards the social licences from the people. It’s how it works in Norway. My Oz colleagues told me this was a safe way to piss Aussies off.

Equinor pulled out of the Bight in Feb 2020. They never admitted community pressure and the lack of a social licence was the reason, but it is safe to assume that not having a social licence poses a real material risk to oil companies.

Who else is doing this in Australia (there are many more): Coal company @AdaniOnline (now Bravus) sponsors rugby team @nthqldcowboys, @originenergy wants to frack and sponsors @NetballAust, and cycling tour @tourdownunder is simply called Santos Tour Down Under.