Big Oil’s Hot Air in Houston;

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Oil CEO’s Presence at Energy Summit Is About Image, Not Change, Says Group

Santa Monica, CA — Big Oil CEOs are meeting in Houston this week to develop a message on making their industry look better — greener and more committed to energy efficiency. But their underlying business strategy hasn’t changed a bit, the Foundation for Taxpayer and Consumer rights said Tuesday. The group criticized the industry practice of bragging about spending on “alternative” energy when such estimates include the development of new fossil fuel sources and uses.

“It’s like the tobacco industry bragging about its spending on cures for cancer, while the total actually includes the development of new cigarettes,” said Jamie Court, president of the nonprofit, nonpartisan FTCR.

FTCR noted that “alternative energy” spending is usually one lump figure on oil company reports (for instance, BP lists “Gas, Power and Renewables” in its last profit report and Chevron lumps together renewables, other “alternatives” and energy efficiency projects in public statements) and challenged the industry to prominently separate true renewables from all other research and development.

The Houston meeting takes its cue from speaking tours this year by Conoco Phillips CEO James Mulva and Shell Oil Co. CEO John Hofmeister, hitting 35 to 50 smaller cities and towns from Reno, Nev., to Edwardsville, Ill., with speeches to rehab the image of oil companies in front of friendlier non-urban audiences. Read a Houston Chronicle article on the meeting.

Both use the same vague references to “alternative” energy spending. But on the subject of federal mandates, one quote from Mulva stands out:

“We support the goal of improving energy efficiency. But market forces and consumer preferences — not federal mandates — are the best way to meet these goals.”

“Under this ‘Mulva market rule,’ we’d still have cars using leaded gas, with no seat belts, airbags or infant and child seats,” said Judy Dugan, research director of the nonprofit, nonpartisan FTCR. “Southern California would still be draped in a choking cloud of smog. And after a hurricane or earthquake, hardware stores could charge $80 for a sheet of plywood without fear of being prosecuted for gouging.”

Without federal action, said FTCR, oil companies will soon bring the U.S., and particularly the Western states, another long spring and summer of $3-plus gasoline. The most useful thing Congress could do would be to “mandate” new anti-trust rules that comprehend an industry as uncompetitive as oil.

“Market forces don’t operate in a concentrated industry such as Big Oil,” said Dugan. “True competition left the market when Exxon ate Mobil and Chevron ate Texaco, and the number of refiners keeps getting smaller. The result is that oil companies see mutual benefit in keeping supplies low and prices high, without overtly conspiring to do so.”

Without strong federal regulation — including an antitrust update and requirements that oil companies put a portion of their outlandish profits into robust development of renewables — meetings like this week’s in Houston are just hot air, said FTCR.

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The Foundation for Taxpayer and Consumer Rights is a nonpartisan, nonprofit organization. More information is available on the web at:

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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