May
23
The Agony and No Ecstasy
May 23, 2008 | Leave a Comment
I was honored to be asked to participate in a conference call with Peter Robertson of Chevron Tuesday afternoon. This is the link to read the text of it. This is the link to the recording of the conversation. (May 20, 2008 API Blogger Conference Call. Also, the audio will download but may not play in Firefox. You may need to copy the link and paste it into Internet Explorer.) It might surprise many how forthright this leader of the oil industry is in talking on a nearly one to one basis.
The recording has been slowed slightly. I think that is so the underlying emotion in Mr. Robertson’s voice isn’t so obvious. While in the beginning at normal speed his diplomacy and ease in getting the facts on his mind said, there is more of a sense of perhaps being harried or a frustrated. If you listen, and you wait through the pause when Mr. Robertson finishes his opening remarks, you can sense we participants are just a little taken aback. So I said . . .”I would say if you want to go into Congress and smack them just like you smacked us, go right ahead. (Laughter.) That was pretty well done if you ask me.” But I’m relying on the sense of it or reading into it what may be completely off base.
In any case Mr. Robertson was a in a different frame of mind this time. With good reason, too. Imagine your job wasn’t panning out at all like you had been working towards, your owners are disappointed and the customers, the press and the government officials blame you for the economy’s ills. In fact, the oil industry isn’t getting the stock price that reflects the profits, the profits are disappearing into investment just a little faster than possible, the taxes are threatening to go up and screw up the plans, the employee’s jobs and production in a serious way. It takes a lot of character, tolerance, and dignity to come forward and stand into such a wind with pride and confidence.
I’m tired too, of hearing the dumb and nefarious effort to lay the price of oil, gasoline and diesel at the feet of the free world’s independent oil companies. By no credible facts can the available supply, the demands and the efficiencies be blamed on them. Not one allegation sticks. Big oil didn’t force anyone to buy that gas guzzler, big oil has for years tried to drill the best U.S. prospects for more oil and gas only to be stood up by government doing the bidding of special interest groups. Big oil has no role in the emerging economies around the world that are pushing demand ever higher as the developed world slows or reduces demand. History might have some stories of guile and greedy machinations, but the big oil companies are publicly held with incredible volumes of information available for analysts of every kind. Lots of nasty allegations, but no facts.
It was 45 minutes of powerful information with a view that everything that can be done is being done. However, the list of what can be done isn’t in the sole and supreme control of the big oil companies. Places to look for oil are mostly in the purview of the world’s governments. The most difficult one to work with, if at all, is the U.S. government. Blaming government isn’t going to get us overpaying consumers anywhere if we don’t recognize the problem in the U.S. – its the special interests who harm us. You could put a dollar figure on it today – Say $35 to $55 excess pricing per barrel times 9.5 million barrels per day or $332.5 to $522.5 million dollars a day. Well that’s saying crude oil should be about $80 at this writing which seems a little high, so it’s more than that. I’d figure it about $2 extra from every single American every day of the week – so far. For a family of four that’s getting to be a lot of money. See your special interest group for an explanation. Big oil can’t fix it in the current political climate.
Mr. Robertson was in D.C. at the behest of Congress and he graciously made extra time to visit with some bloggers. Maybe the most powerful part was the sense of his feelings, because for us the facts are pretty well known. The main theme in the conversation is the matter of supplies and demand, with efficiency thrown in. Mr. Robertson justifiably sees his job and the business of Chevron to provide supplies. Spending into investments of more supply is 2/3s spent outside of the U.S. I find that an embarrassment, not only do we export most or more of a billion dollars a day to buy crude oil, our own companies cannot spend the profits here to improve supply. How dumb is that? It’s not that big oil won’t, they can’t.
Another theme that stands out is the demand outside of the developed world and the subsidies that governments provide to insulate their populations from the market. Factually that might work in a country with an abundance of oil, but for others the subsidy is about gathering money from everyone and spending it to support the richest few that can afford a car or other high energy cost tools. We’ll see how long that can go on, all those less well to do are not going to be happy to find out they have been working for others to live even better at their personal expense.
There are several other points well made by Mr. Robertson that justify our attention. They include the issues of the shortages of personnel, taxes, barriers to investment, splits of the investments between supply, demand and efficiency, competition, oil speculators, and we even touched on biofuels and geothermal. It’s a read or a listen that can be well used for becoming better informed.
But ever since the conversation I’ve been more troubled by the sense that the petroleum industry isn’t having much of a high from the high prices. The problems and the problems from the problems are building up. I for one have been accused of “loving the oil business” and while love is a wholly inappropriate term, I do appreciate the industry and have for years been terribly concerned. You could say I “love the wind industry” much more but they hardly need any attention from me as the are really on great run worldwide.
The thing that needs said is that the mass media, popular press and much of the population are deliberately misleading and feeding ignorance and mis and dis information that wastes huge amounts of human capital, personal incomes, and needlessly depresses the time of our lives. Those actions and the results are the enemy of everyone seeking good standards of living, security and growing economies. Writing a story or article, making a speech or just repeating such drivel is no better or different than the wicked propaganda of the dictators and tyrants that threaten free people everywhere.
I am concerned about the oil and gas business, because I know we will need them, albeit less and less over time, for decades to come. I will say this, that for whatever reasons the feelings expressed that I picked up early in the conversation with Mr. Robertson made him more human to me, and the circumstances more real, than the top quality statesman, business leader façade shown to the congressional committees. I am firmly convinced that the committee members who commanded his presence are deserving of no more respect than the neighbor who kindly returned my errant and loved dog. Those who so feverishly and surreptitiously fritter away my tax dollars and have already destroyed the income potential of our children, grandchildren and great-grandchildren as public servants are dismal and shameful examples for history. There, see why I don’t write about politics?
At some risk of condemnation I say this – “Mr. Robertson, you may call me a friend.”
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