ABC: Why is Shell Taking from Your Grandchildren's College Fund?
Gas prices have been going up, and at least one grandmother is upset.
“Why am I spending my grandchildren’s college money so I can drive this car? Why? What is – what is the reason for this?” she asked on the November 14 “Good Morning America.”
To answer her question, the ABC morning show pressed the president of Shell Oil, John Hofmeister.
Co-anchor Robin Roberts asked what Hofmeister himself could offer those customers “who are really hurting.”
Hofmeister reminded Roberts that Americans are not the only ones who want to buy gas.
“Part of it is driven by global demand, where people all over the world like to drive just like Americans do,” he said. “More and more Chinese, more and more Indians now have access to automobiles. There are only limited sources of the supply of oil and as a result we end up with demand all over.”
After Hofmeister’s global supply clarification, Roberts ignored the economic explanation and turned to attack Shell’s profits.
“You are in the business of making money, no one is disputing that,” said Roberts, “But your profits, Shell’s profits are up 11 percent and some people are saying, you know, in a time like this, in an economy where people are really struggling to make ends meet, could you cut back a bit on your profits – you’re still going to make billions of dollars – but you could really help out a lot of people here by doing that.”
Hofmeister calmly explained to Roberts the business side of a company as large as Shell.
“We do have a responsibility to our shareholders,” he said, “and of course they like to see our profits go up, ah, as time goes on. The reality is, what do we do with those profits. If we’re just sitting on that money and doing nothing with it, that’s wrong.”
Even after Hofmeister offered detailed explanations of at least a billion dollars’ worth of research his company was doing on alternative fuels and technologies, Roberts wasn’t satisfied.
“Isn’t it true that only about 1 percent of your profits actually go into looking for alternative fuels? Is that enough? 1 percent of your profits?” argued Roberts. She suggested, “you can understand that when you say a billion dollars it sounds like a lot, but when you make $58 billion, it doesn’t seem as much to people.”
“We use 10,000 gallons of oil a second in our country,” Hofmeister said as he reiterated the huge demand for gasoline. “That’s a backyard swimming pool full of oil every second. So if we are going to replace that with alternatives, it’s going to take quite a long time to gear up our manufacturing capability.”