After asking if Hofmeister thought the price of gas was "reasonable," Vieira launched into the conspiracy theories:
Vieira: "Let's talk about the refineries for a minute because there's been a lot of controversy about them. Maintenance problems at refineries around the country. There are some people, consumer activists, some analysts and even some politicians like Senator Schumer here in New York, who believe that the oil companies are basically holding back the production of gas, they're slow on repairs of their refineries, to keep the price of gas high. Senator Schumer has not gone so far as to say that the oil companies are in collusion but he did say, quote, 'that they wink at each other and do the same thing.' First I'd like your response to that."
Then after Hofmeister denied the charge of collusion, Vieira attempted to play the populist role noting, "among certain consumers," there is a belief "the oil companies are a bunch of thieves," that, "are ripping people off."
Vieira: "I'm picturing some people watching us right now at home and they're probably screaming at the television because they just went to the pump, they shelled out maybe $50 or more to fill up their car. They also know that companies like Shell are posting record profits. In the first quarter of this year, I think the profits for Shell were over $7 billion. Now it may not be fair, it may not be right but there is a perception out there in the country, among certain consumers, that the oil companies are a bunch of thieves. That you're ripping people off. Now I know you've been going around the country talking to people in 50 cities. What are they saying to you and what are you saying back to them?"
After Hofmeister made a plea for an expansion of greater oil exploration Vieira did wonder if that was a realistic expectation under "a Democratically-controlled Congress," but then concluded with the "addiction to oil" line:
Vieira: "And finally, very quickly, will we ever get over this addiction to oil, which I think, for this country, is a dangerous thing?"
The following is the full conversation between Vieira and Hofmeister as it occurred on the May 14th Today show:
Meredith Vieira: "John Hofmeister is the president of the Shell Oil company. Good morning to you, Mr. Hofmeister."
John Hofmeister, Shell Oil: "Good morning, Meredith."
Vieira: "Feel a little bit like deja vu, all over again. You were here in the studio, a year ago, around this time talking about the high price of gas. How it was dictated by supply and demand and basically oil companies had very little control over the global economy. Now here you are back again, yet again in May, prices even higher. As Matt said they're averaging about $3.07 a gallon. In some places even higher than that, 17 cents above what it was a year ago. And meanwhile people are really feeling the pain at the pump. There was a poll conducted by CNN and Opinion Research Corporation, 66 percent of those people who were polled said that they are suffering financial hardship as a result of these gas prices. I have to ask you, sir, as the president of Shell, do you believe that the price of gas is reasonable right now?"
Hofmeister: "Very painful prices, Meredith and-"
Vieira: "Is it reasonable?"
Hofmeister: "Is it reasonable? It's reasonable from a supply, demand situation. We're currently at inventories 16 percent below, I should say the lowest in 16 years. That's because of the coming out of the winter season in which we do a lot of turnarounds, a lot of maintenance on our refineries. With the low inventories and the continuing demand that's what is pushing the price up right now."
Vieira: "Let's talk about the refineries for a minute because there's been a lot of controversy about them. Maintenance problems at refineries around the country. There are some people, consumer activists, some analysts and even some politicians like Senator Schumer here in New York, who believe that the oil companies are basically holding back the production of gas, they're slow on repairs of their refineries, to keep the price of gas high. Senator Schumer has not gone so far as to say that the oil companies are in collusion but he did say, quote, 'that they wink at each other and do the same thing.' First I'd like your response to that."
Hofmeister: "Well we do not do the same thing. We do not collude with one another. It's great sport to attack the oil companies, particularly, when people are upset but the reality is the winter season is the best time to do preventative maintenance. We do that every year and that's not in collusion. That's because to try to do maintenance in the summer, outside work, wearing all kinds of safety gear in tropical conditions along the Gulf Coast, that's very difficult on people."
Vieira: "So the oil companies are not, in any way, holding back the production of gas?"
Hofmeister: "It would be un-economic to do so. These margins being what they are, we're trying to produce everything we can produce but they're-"
Vieira: "I know, oh I'm sorry."
Hofmeister: "-but they're have been a couple of fires in a couple of refineries which have aggravated the situation. So it's not just the maintenance that's been happening but a couple of fires in a state like Texas or California can really affect the supply and demand equation in a short term basis."
Vieira: "I'm picturing some people watching us right now at home and they're probably screaming at the television because they just went to the pump, they shelled out maybe $50 or more to fill up their car. They also know that companies like Shell are posting record profits. In the first quarter of this year, I think the profits for Shell were over $7 billion. Now it may not be fair, it may not be right but there is a perception out there in the country, among certain consumers, that the oil companies are a bunch of thieves. That you're ripping people off. Now I know you've been going around the country talking to people in 50 cities. What are they saying to you and what are you saying back to them?"
Hofmeister: "Well as we go around, we've been to 33 cities since I was here a year ago and we've talked to thousands and thousands of people from coast-to-coast. What they're really saying is, 'we are unhappy, we are angry. We are frustrated and we are in fear that we're running out of oil and gas. Is that true? We're running out of oil and gas? Well the reality is we're not. There's plenty of oil and gas out there, if we had public policy to support production of more oil and gas we'd have a lot more supply coming into the system. Actually part of the supply, demand crunch that we're experiencing right now is public policy that allows us to only access oil and gas in 15 percent of the outer-continental shelf, 15 percent. 85 percent we're banned from exploring for oil and gas. Meanwhile we bring in expensive imports from around the world. We would much rather see a situation where we could explore across the outer-continental shelf. Where we could have public policy enabling the building of new refining capacity. Shell is looking with its partner, Motiva, at a major refinery expansion in Port Arthur, Texas. And we-"
Vieira: "Do you see that kind of exploration, though, happening with a Democratically-controlled Congress?"
Hofmeister: "Well here's the reality. We have a 100-year infrastructure of oil and gas. We have to continue to feed that infrastructure to sustain our economic growth model, to sustain our lifestyle. If we don't bring in more oil and gas into the system we're gonna have to pay more and more and more. I'd hate to see prices double or triple what they are today because we failed to explore for more gas and oil."
Vieira: "Meanwhile public policy seems to be going more towards bio-fuels and away from oil which is something you don't seem to support, even though they are renewable and they're cleaner."
Hofmeister: "Oh Shell's been in bio-fuels for 30 years. We support bio-fuels. We would welcome moving towards a 10 percent supply of bio-fuel in this country but we do prefer second generation ethanol. Corn ethanol competes with food. It's a fine fuel but it competes with food. We would rather use cellulistic ethanol, which we're working on, that's where we're investing our money, to add a 10 percent supply to the fuel chain."
Vieira: "And finally, very quickly, will we ever get over this addiction to oil, which I think, for this country, is a dangerous thing?"
Hofmeister: "We will. I'm convinced we will. And we hear this in the cities we go to. People are impressed with technology. They love technology. Technology is gonna take us from oil and gas over decades, not overnight, but over decades to renewable and alternative forms of energy and we'll be there."
Vieira: "John Hofmeister, thank you very much for joining us."
Hofmeister: "Thank you."
Editor's Note (Ken Shepherd |13:51 EDT): Related posts on the media's bias relating to gas and oil prices may be found here.
