Conoco’s looking for love

Before a “Conversation On Energy” town hall-style meeting at a Reno hotel, Roberta Cortilla and Paul Warsitz of the Reno-based Bio-Products Discovery Group sat near the front of the conference room. Cortilla, her dark hair pulled neatly back with a black band, sipped a glass of wine she’d brought in from the bar.She wasn’t sure why oil company executives invited all registered voters out on a Wednesday night to talk about energy.

“I have a theory that it has something to do with the Democratic Party being in control of Congress,” she said.

Warsitz, 67, nodded. The white-haired entrepreneur considers himself one of the pioneers of hybrid cars. His Sunnyvale, Calif., company, he said, developed a working hybrid that got around 70 miles per gallon in 1967.

But consumers and companies weren’t interested then. Americans have been so addicted to gasoline, Warsitz said, that they didn’t want to consider hybrids—or the fuel cells his company developed in later years.

“People weren’t interested,” he said. “The technology was there.”

Road show
The meeting began with a welcome by Roger Jacobsen, vice president of academic affairs for the Desert Research Institute, which cosponsored the event. Jacobsen started to talk, but the microphone wasn’t turned on. The crowd let him know.

One voice sang out: “We ran out of energy.”

As public relations pseudo events go, the energy town hall meeting sponsored in Reno by Conoco Phillips—part of a 35-city tour—was a hit. About 300 people packed a conference room, some taking notes on free pads of paper with the company logo.

Two oil execs—John Lowe, Conoco Phillips executive VP and drilling expert Joe Leone—stayed on message most of the time. For balance, the panel included the Nature Conservancy’s Kathryn Landreth and biochemist Jason Geddes who wore his Renewable Energy and Energy Conservation Taskforce hat. The oil company gives money to the former. The latter would take a check if Conoco wants to write one, Geddes joked.

Money talks. But it can’t make people like you. And the oil company apparently wants to improve its public image. In an American Petroleum Institute survey, Lowe said, the oil industry ranked dead last in terms of public favor.

“We ranked behind tobacco,” Lowe said to polite laughter. “Our industry has lost touch with the public. We’re viewed as part of the problem. We want to be seen as part of the solution. It’s disheartening for employees who work hard every day to responsibly deliver energy to the world.”

Conoco’s platform
The company’s talking points: Cheap, easy oil in easily accessible areas is running out “in places we’re allowed to look,” Leone said. (Read: If you want gas for your SUVs, we’re going to have to drill where we’re not allowed to look, like in national parks and wilderness refuges.)

The world uses 85 million barrels of oil a day and that’s expected to increase 40 percent by 2030. It will be important to find efficient ways to extract thick oil from sand in Canada and recover oil shale from the Rocky Mountains. Conoco is also importing liquefied natural gas from overseas and is experimenting with adding soybean and vegetable oil to their refinement process.

How about asking consumers to reduce consumption on behalf of dwindling resources? That needs to be part of the solution, the Conoco execs agreed.

“We believe deeply in conservation,” Leone said. “It takes energy to make energy.”

If Conoco was trying to be pro-active, it might have been too little, too late.

The day after Reno’s town hall meeting, House Democrats passed a bill—the Clean Energy Act of 2007—that would end $14 billion in tax breaks for oil companies and put billions into a fund for renewable and alternative energy investment. Democrats said the bill would reduce reliance on foreign oil.

Lowe said Wednesday that energy independence isn’t going to happen in a nation that uses 25 percent of the world’s energy resources while contributing only 3 percent.

“At Conoco Phillips, we don’t believe that energy independence is practical, possible or achievable,” Lowe said. “We need more research into all forms of potential energy. And we need to protect the environment in all we do. Conoco Phillips is making progress. We don’t have all the answers. We need dialogue.”

That dialogue extends to talk of carbon dioxide emissions—and the regulation thereof. Conoco execs hoped to convey the image that the company cares so much about the environment and global warming that it is taking steps on its own to deal with CO2 emissions.

When an audience member asked panelists about a carbon tax, Lowe jumped in.

“Let’s face it,” he said. “It’s not Conoco Phillips who pays the tax. It’s all of you who pay the tax. And Americans don’t like paying taxes. That’s why this won’t be successful.”

The tax would have a “ripple effect” on the economy, he said. And it doesn’t fit the U.S. consumer mindset. “If you tell Europeans that they can spend $1 more on gas and make a significant improvement to the environment, they say OK. Not here.”

Government’s role
Lowe said nothing about several bills now before Congress to address global warming, which are being called “the hottest on the Hill.”

Sens. Dianne Feinstein, D-Calif., and Tom Carper, D-Del., last week introduced a bill to cut carbon dioxide emissions from power plants by 10 percent from 2006 levels by 2020.

A bill from Sen. Bernie Sanders, I-Vt., supported by many environmental groups, would cut greenhouse gas emissions by 80 percent from 1990 levels by 2050.

Arizona Sen. John McCain and Sen. Joe Lieberman, I-Conn., sponsored a bill initiating a “cap-and-trade” program to cut emissions to one-third of 2000 levels by 2050. And Sen. Jeff Bingaman, D-N.M., chair of the Energy and Natural Resources Committee, offered a bill to freeze CO2 emissions at projected 2014 levels by 2020.

Oil exec Lowe remained personable and cool-headed during a question-answer session that ranged wildly from bioterrorism to why the company isn’t making more ethanol. Dennis Wyatt, 72, a retired civilian seaman, delivered a scathing monologue on oil addiction that ended: “Will you make some concentrated effort to eliminate yourselves?”

Lowe’s good nature dissolved briefly when a stocking-capped young man in the back row asked why Venezuela’s leader Hugo Chavez shouldn’t have the right to nationalize the oil industry in his country.

“Before you argue for nationalization, there’s a little book you should read,” Lowe said curtly. “It’s by Adam Smith, The Wealth of Nations.”

Lowe noted that 16 percent of U.S. oil comes from Venezuela. Conoco has invested billions of dollars in its operations there.

“What concerns us is a country that welcomes us with open arms and lets us put $7 billion into a company. Then after the $7 billion, it’s their oil,” he said. “The world is truly flat when it comes to energy.”