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.
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.