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Houston Chronicle: Oil leader sees dialogue as solution

Nov. 12, 2006, 12:11AM
Copyright 2006 Houston Chronicle

PHILADELPHIA — John Hofmeister didn’t come here looking for sympathy. At a time of record oil industry profits, he came hoping to sow seeds of understanding.

I tagged along last week with the Shell Oil Co. president when he stopped here as part of a 50-city tour to discuss America’s energy needs.

Hofmeister spent the day meeting with civic leaders and talking to high school students, and he capped it off with a town hall meeting aimed at starting a dialogue about energy issues.

Industry was demonized

Last year, after hurricanes Katrina and Rita sent oil prices and public outrage soaring, I wrote a couple of columns in which I said that the oil industry was being demonized because it had done nothing to help the public understand how its business works.

It turns out that Hofmeister agrees, which was why he asked me to join him.

“We’ve done a lousy job of telling our story,” he said.

The industry has become too internalized in its culture. Low oil prices in the late 1980s and 1990s caused many consumers to think of cheap gasoline as a right, he said. As long as prices remained low, consumers had few complaints about oil companies, and oil companies worried little about public perception.

Last year’s spikes reminded America of its vulnerability. It’s a lesson quickly forgotten. Pump prices have fallen in recent months, and oil companies have seen demand rise again.

“We use energy unwisely because we can,” Hofmeister said.

Questions from the public

At the town hall meeting, about 100 people moved between three stations, answering questions such as “what does the U.S. need to do to manage energy demand?” and “what should Shell be doing to increase domestic oil supply?”

The feedback will be collected on a Web site and used in Shell’s public policy efforts.

Hofmeister said he opted for the approach after considering more conventional tactics such as an advertising campaign. Direct dialogue, he decided, would be more effective.

When he testified before Congress after last year’s hurricanes, Hofmeister said he had only Shell’s internal data on which to base his comments.

“We concluded that that’s not enough,” he said. He decided to solicit the views of civic leaders, customers, business partners and academics from around the country.

That’s not something that people expected from an executive of Big Oil.

“I was surprised he wanted to do it,” said Patricia Coulter, president of the Urban League of Philadelphia, whose board met Thursday morning with Hofmeister.

Others were more cautious.

“There’s a certain degree of suspicion about this,” said Judy Wicks, a business owner and head of the Sustainable Business Network of Greater Philadelphia. She wondered whether Shell would use the data it’s collecting or whether the town hall meeting was just elaborate window dressing.

Changing our thinking

The message in Hofmeister’s method — that everyone needs to change their thinking about energy — is hard to argue with.

“Energy is the lifeblood of our economy,” he said.

It’s a message, though, that’s clouded by a general distrust of energy companies, the lingering pain of high prices and the specter of record oil company profits.

“The profits are huge, there’s no denying that,” Hofmeister said. But he stressed that the surge in prices last year was bad for the industry because it led to higher production costs on the exploration side and narrower margins on the retail side.

“What I’m saying is we don’t like these higher crude prices,” he told the Urban League.

A good salesman

Hofmeister is a good salesman, but even here in the state where the oil business began, peddling the industry’s credibility isn’t easy. Many people seemed unsure of what to make of an oil company coming to town and talking about conservation and global warming.

That, however, is exactly what Hofmeister wants to do: to get people thinking and to get them talking.

“Nobody wins when we’re discounting each other’s point of view,” he told me later. “I think education and information is the solution here, because the next 50 years will be challenging.”

No more challenging, perhaps, than trying to foster understanding amid widespread public distrust.

“Most people say, ‘John, we don’t believe you.’ I’m not looking for sympathy,” he said.

What he’s looking for is a way to spread greater public understanding of how his business works. That’s something that’s long overdue.

Loren Steffy is the Chronicle’s business columnist. His commentary appears Sundays, Wednesdays and Fridays. Contact him at [email protected]. His blog is at and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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