Getty Images: ExxonMobil CEO Rex Tillerson, Chevron CEO John Watson, ConocoPhillips CEO James Mulva, Shell President Marvin Odum, and Lamar McKay, president of BP America, at a House hearing.
Top execs from the major oil companies were called before a Senate sub-committee hearing today, as lawmakers demanded to know why fuel prices are so high.
Allegations of price-fixing and racketeering among the major fuel companies prompted the formation of the panel. Lawmakers grilled the execs relentlessly for nearly 25 minutes before they were satisfied with the answers and congratulated themselves on a job well done.
The oil execs and lawmakers wrapped up the meeting early and jetted down to the private Caribbean island owned by Shell Oil. The exhausted troop settled in for drinks and baby lobster salads before heading out to golf.
Following is the official transcript from the hearing:
Senator Gill Talbot (D, Texas): Good morning. First of all, I want to thank you all for coming. Lamar, Jimmy, Marv, John…thanks for showing up. Let’s begin. Mr. Tillman, gas prices have risen nearly 50 percent in the last year. Rex, can you explain this?
Exxon CEO, Rex Tillman: Firstly, increased global demand is driving up prices. It’s a pure case of supply and demand. Secondly, hippies and their alternative energies have created a glut in the oil supply chain. We are sitting on billions of barrels of crude for which we have no customers. In addition, aging refineries and drilling equipment cost much more to maintain as time goes on. At the same time, the cost of new infrastructure keeps rising. Also salaries for oil company executives have skyrocketed. I have to pay myself nearly $30 million a year. How would you like to be responsible for writing that check? And lastly, due to the increase in cash reserves, we have been forced to hire a battery of accountants to help us redistribute this capital to areas that would be most beneficial, like my pocket. I think gas is very affordable for average folks like myself. Remember, Senator, that we could be charging $20 a gallon if we wanted. But our customers come first.
Senator Talbot: May I ask how much you pay for a gallon of gasoline, Mr. Tillman?
Tillman: Pay? Hell, I don’t pay nothin’. I have an expense account just like you do, Senator.
Talbot: My constituents are asking me to inquire if there is price-gouging at the pumps. How do you respond to these allegations?
Tillman: Senator, I work in an industry that uses a lot of fuel in our day-to-day operations. When fuel prices go up, our costs go up, so we have to raise the price of our product and pass it on to our customers.
Talbot: What you’re telling me, then, is that when an oil company like Exxon/Mobil raises the price of fuel, you need to raise it again just to make ends meet?
Tillman: We have no choice Senator. I believe now you see the difficulty of our situation.
Talbot: People in my district tell me that they are paying upwards of $100 to fill their vehicles at the pumps. I cannot believe this!
Tillman: I can’t believe it, either. It amazes me sometimes that we can keep the price of gasoline so low. Senator, I thank you for recognizing our efforts.
Senator Talbot: You’re very welcome, Rex. I believe that I speak for all the members of the committee when I thank you all for coming here and being so candid. I think we’re done here. Good morning.
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