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The Dallas Morning News: Public perceptions bother Texas oil executives: Exxon chief, other CEOs, experts discuss congressional wish list

*Shell Oil President, John Hofmeister, King of BS…

Elizabeth Souder,Texas
Published: Feb 14, 2007

HOUSTON — Regular people don’t know much about the oil industry, and that makes it tough for energy companies to get what they need in Washington, Texas oil executives said Tuesday.

People don’t understand how difficult it is to pull oil from thousands of feet below sea level, ship it across the world, and make gasoline that meets environmental restrictions, Exxon Mobil Corp. chief executive Rex Tillerson said in a speech to kick off a Cambridge Energy Research Associates conference.

“The interface that we have with the public more often is at the pump, the gasoline pump. And the public today doesn’t see our products as being innovative or technologically advanced,” said the head of the Irving oil company. “They see gasoline and say, ‘This is the same gasoline that I’ve been buying and my parents have been buying, and I don’t understand these changes in the marketplace.’ ”

And Shell Oil Co. president John Hofmeister said at the same conference that people don’t grasp how close the U.S. came to a real gasoline shortage after the hurricanes in 2005. Instead of congratulating oil companies for keeping gasoline flowing, there was a public outcry about high pump prices.

“Prices and profits were completely not understood,” he said. “And since that time, the threat of bad public policy has been with us on a daily basis.”

Oil executives and experts at the annual conference reiterated their wish list for Congress: to be allowed to drill in more areas of the U.S., for the threat of new taxes to disappear, and for the U.S. to take a global approach to restricting greenhouse gas emissions that doesn’t hinder economic growth.

Congress is considering legislation to regulate emissions of carbon dioxide, a greenhouse gas that comes from power plants, cars and other machines that use hydrocarbons for fuel.

And — as Exxon has reported record earnings for the past two years in a row — lawmakers have considered new taxes on energy companies. The oil executives said Tuesday that they need their profit to invest in more projects to bring fuel to consumers, particularly as global demand for fuel increases.

“In times like this we do extraordinarily well, which we better do, because times like this don’t last very long,” Mr. Tillerson said.

He urged policy-makers to consider the global implications of any carbon dioxide restrictions and to keep in mind that energy plays an important role in economic development, particularly in underdeveloped countries.

Mr. Tillerson said national or regional restrictions “are quite frankly not likely to make much of a difference. It might make people feel better because they feel like they’re doing something.”

And he spoke frankly about the issue of building 16 more coal-fired power plants in Texas.

“In terms of meeting the electricity demands in Texas, I think you’re going to have to keep all the options on the table,” Mr. Tillerson said during a question-and-answer session with the news media after his speech.

“If you constrain electricity and power generation supply, you will constrain the growth in Texas,” he said.

“Coal plants are just part of the total picture that needs to be considered.”

Still, Mr. Tillerson repeated the Exxon view that, while the science of climate change remains unclear, there’s a risk that humans are contributing to global warming; so we should do something.

He spoke of efforts that Exxon, the largest publicly traded company in the world, has taken to improve energy efficiency.

He said one of Exxon’s roles in environmental action is to help customers use products more efficiently.

And he also repeated his decision to not lead Exxon into the alternative fuel industry.

“I’m not an expert on biofuels. I don’t know much about farming. And I don’t have a lot of technology I can add to moonshine,” he said to a conference room full of energy executives and policymakers from around the world.

“And I’m not at all trivializing the important role that biofuels can play. With the energy demand before us, the world is going to need all the fuels it can get,” he said.

Shell has taken a different tack. Mr. Hofmeister said the company’s goal is to develop at least one renewable energy product into “a material business in the future.”

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