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Copy-Machine Oil Hearings

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Thu, May 22, 2008 at 5:19 pm

    Copy-Machine Oil Hearings

    5-22-08 by dugan

     

     

    Watching the same pack of oil executives troop to the House of Representatives today and the Senate yesterday was mostly a deja vu experience. The execs’ canned testimony was from the same outline they used earlier this year and in 2005 and 2006
    hearings–high prices aren’t our fault; everything will be better if
    you let us drill in the Arctic and off the California coast; don’t you
    dare touch our tax breaks. Only the numbers change, continuously for
    the worse.  Today brought the added nonentertainment of a House hearing
    to question federal Energy Secretary Samuel  Bodman, arguably
    the most boring and inactive member of President Bush’s cabinet. He
    hewed straight to the oil company line: prices are just supply and
    demand; there’s no speculation driving the price of oil; there’s no
    reason to sell oil from the federal reserve, even though Bill Clinton
    did it in 2000 and prices fell. Bodman’s statement about the
    "globalization of energy" sounded straight from a Chevron ad.

    The
    most unexpected statement in the two days of hearings came from Shell
    President John Hofmeister, who allowed that his company could turn a
    profit on oil at $35 to $65 a barrel. Here’s the Senate exchange:

    With light, sweet crude for July delivery soaring $4.19 a barrel
    Wednesday to close at a breathtaking $133.17 on the New York Mercantile
    Exchange, and gas prices — according to AAA — averaging nearly $3.81 a
    gallon nationwide for regular, lawmakers wanted to know where the oil
    executives thought oil prices should be.

    Shell’s Hofmeister said a price range of $35 to $65 a barrel would be consistent with "our ability to run a successful company."

    But Chevron Vice Chairman Peter Robertson argued a company can’t
    produce oil from the kind of areas now available to them for that kind
    of price. And ConocoPhillips’ Lowe argued that price would be north of
    $90 a barrel.

     Hofmeister, the first to answer, spoke an insiders’ truth. After
    all, the same companies made record profits in 2005 and 2006, when oil
    was exactly within that range.

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