The oil and gas industry has turned a page in its public relations. The June 18 edition of NBC’s Meet the Press featured the chief executives of three of the world’s biggest oil companies-talking about oil prices. That’s right: the top executives, the big bosses, three of them, sitting in one place, talking about oil prices.
Not very long ago, the scene would have been unimaginable. Oil and gas executives didn’t discuss oil prices in public. They certainly didn’t do so in groups. They didn’t do anything that even hinted at price collusion. They had little to gain and much to lose from discussing oil prices in public.
More to lose
It turns out that they have even less to gain and more to lose from traditional silence. Their business has become a national morality play in which they play the villains. The public is irate about high gasoline prices, and politicians are exploiting the outrage on behalf of state-centered energy policy. This wouldn’t be happening if the public held any positive regard for oil companies and the people who run them. But they have only enmity. And why not? Until recently, other than those in Houston and a handful of other energy centers, most people who vote and consume oil seldom laid eyes on the people who run one of the world’s largest and most important businesses.
The core insight here is not that the old assumption was untrue. If oil executives discuss oil prices in public, especially if they do so in groups, people indeed will suspect collusion and price manipulation. That has always been the case and remains so now. The core insight is that people harbor the same suspicions no matter what companies do or don’t do. Starting at the nadir of public acceptance, oil executives have nothing to lose by speaking out about why prices are high and their companies are reporting large profits. Given how such low standing with the public-the companies’ customers-poisons energy policy-making, in fact, to not speak out now is derelict.
Companies apparently have come around to this point of view. The June 18 Meet the Press program wasn’t the first recent sighting of big-company oil executives on national television. At separate times recently, for example, Chevron Corp. Chairman and Chief Executive Officer David O’Reilly and ExxonMobil Corp. Chairman and CEO Rex W. Tillerson have appeared on NBC’s Today Show.
The Meet the Press show was especially notable, however, because it’s a power venue and because the executives appeared in force. O’Reilly was one member of the team. The others were ConocoPhillips Chairman and CEO James J. Mulva and Shell Oil Co. Pres. John Hofmeister.
Host Tim Russert bored into the unpopularity of oil companies, citing poll numbers showing powerfully negative feelings about them and asking, “Why is that?” The executives seemed to prefer talking about their efforts to develop supply and the need for greater access to natural resources, which Russert ignored. He hammered on oil company profits, at one point suggesting that oil companies somehow cut their earnings growth rate by half in order to lower fuel prices. When O’Reilly tried to put current profits in the perspective of history and scale, Russert insisted, “But you could make less profit and lower prices at the pump if you chose to.” He later elicited a confession that oil companies are “in the business to make money” then wondered why the US hasn’t mimicked Brazil’s commitment to ethanol, which enabled the executives to report that their companies do, in fact, invest in renewable energy.
Tough proxy
From such dialog, not much enlightenment is possible, which is not to fault either Russert or his guests. Russert fulfilled his role as tough proxy for a public that doesn’t know enough about energy to ask intelligence questions. The oil executives made what few points they could in such a format.
What’s most important is that they showed up. Their companies, their industry, and their customers need them to show up in more places, more often. Eventually, the questions will improve.