Yesterday on NBC's "Meet the Press" we were treated to a heavy dose of oil patch pablum by the likes of the chairmen of ConocoPhillips, Chevron Corp., and the president of Shell Oil. We "learned" a great deal.
Mr. John Hofmeister, president of Shell Oil informed us that "If we didn't have this level of profitability, I don't think we could get supplies to where they need to get to." The clucking noise of acknowledged contentment you heard in the background, was that of Lee Raymond, erstwhile chairman of Exxon-Mobil, counting his $400 million retirement package for having personally pumped gas into your car.
Mr. O'Reilly, chairman of Chevron advised us that "profits are in the mid-range". This after ringing up billions at levels never experienced before by his company or the oil patch generally for that matter. Mr. O'Reilly was clearly an "A" student at the feet of his current OPEC headmasters who learned their craft well from Mr. O'Reilly's predecessors. After all, Chevron's profits are chump change compared to those of say, OPEC kingpin, Saudi Arabia. The Saudi's, with production costs at less than $1.50 per barrel, with their infrastructure capital costs having long since been amortized, and now selling some 10 million barrels a day at the prevailing $70 per barrel to world markets, you do the numbers.
Next up was James A. Mulva, the chairman of ConocoPhillips. Mr. Mulva reminded us that in Europe gasoline prices are more like $5.00 a gallon. This has become one of the oil industry's favored ploys as though this differential was the doing of the industry's efficiencies and civic commitment. The differences, as many of us know, has to do with variances in tax structures, and not the beneficence of the oil companies. Those big fat profit margins remain big and fat on both sides of the pond. But thanks Mr. Mulva, just being reminded that someone pays more does help.
And on and on it went. Talk about television fatigue. But one point where Mr. Mulva was right on target, is when he reminded us that we as a nation have 5 percent of the world's population and consume 25 percent of the world's fossil fuels. Now Mr. Mulva, if you would help us get our arms around that dilemma, without simply raising prices and adding to your bottom line, that would be something we would really want to sit up and listen to.