James Hackett was named President and Chief Executive Officer of the Company in December 2003, and Chairman of the Board of the Company in January 2006. Prior to joining the Company, Mr. Hackett was the Chief Operating Officer of Devon Energy Corporation from April 2003 to December 2003, following Devon's merger with Ocean Energy, Inc. Mr. Hackett was President and Chief Executive Officer of Ocean Energy, Inc. from March 1999 to April 2003 and was Chairman of the Board from January 2000 to April 2003. He served as Chief Executive Officer and President of Seagull Energy Corporation from September 1998 until March 1999 and as Chairman of the Board from January 1999 to March 1999 prior to its merger with Ocean Energy. He currently serves as a Director of Fluor Corporation and Halliburton, and serves as Chairman of the Federal Reserve Bank of Dallas.
Question: What does a responsible energy policy look like?
Jim Hackett: Well I think it is difficult for us to get that if we are listening to the media, because unfortunately in the field of energy it is actually one of the feelings there are several I am sure that don’t lend themselves to sound bytes and one of the difficulties, I think energy industry has in telling it stories is that very fact is that, it is a very easy to tell people why you should not have extracted industries, it is very difficult to tell them why you need them. We have built an economy for better or worse for over a 100 years that is based on highly extractive industries and none of those are completely environmentally friendly, but all the alternatives that we have been talking about, I think have absolutely the same kinds of feelings, that is what very few people realized, I don’t how many of you are observers would have actually seen when farms and we talked about how wonderful they are, but we have to happen to have a fair amount of them in the west, in particular I live in Texas which become kind of hard area for west Texas in Okalahoma and they are got a awful sights for the most part and they cover a huge amounts acreage and we know they kill birds, we know in other ways they are very good and wonderful, but we almost lost the electric power system in Texas, because the wind went from the factor of 500 down to a factor of one, because the wind stops, so no electricity was being generated, it is not an easily storable form of energy. So what we first had to do is backup and say “what do we want from energy and what do we think we can actually get some energy” and the problem is that we all say we want alternative fuels, but none of us can actually get that, it is nice to one fusion, but we haven’t figured out away to create fusion, it is wonderful to bring the sun’s power directly into our homes, but we haven’t figured out a way to do that economically as well and what is missing often times amongst all the rhetoric is an actually economics lesson and what is that you want and what is it caused you to get there. There is a lot of rhetoric around global warming. There is lot rhetoric around oil, gas, coal and etcetera. My assumption is in the most energy consuming economy in the world, because it is the biggest economy in the world by long shabby United States of America is that people have to start understanding that when you turn on the electric switch, 50% of its coming from coal another 20% is coming from nuclear another 20% is coming form natural gas and the rest is coming from Hydro for the most part in very little from alternative fuel. Would we all love to have it come from some clean renewable energy source? Absolutely, when is that going to happen, not my lifetime and probably not yours either. Now, does that mean we shouldn’t be doing things about it? Not at all, we should. We absolutely have to, but when I could sit down with department of energy secretary and ask him how much you could always spend on new research for alternative fuels and he tells me we are spending 250 this is several years ago and we can may be spend another 250 wisely before it became really marginal turns returns that means we can’t spend 18 billion dollars, which is what some of your congressmen are telling it can be done, that they would like to actually go and have all the subsidies $18 billion worth of alternative fuels, that is not science leading our energy solution, that is actually politics with your energy solution. I guess I am old enough to realize that when federal government says they are here to help you, it generally doesn’t workout well in a great classical example of that is, and this is only because it matters to every generation that follows mine is corn-based ethanol, it held a lot of cocas votes during the recent run up to the elections, right. We thought it was a some kind of wonderful fuel, it turns out, it is every bit is polluting in terms of as any other natural form of gasoline, it is much less efficient, it is driven record prices for food and for lifestyle it depends on that food and it is a horrible answers, it is arguably a best energy neutral, may be 20% positive, may be 20% negative, it is a horrible answer yet, our government, yours and my government is also slapping an import fuel, tax on sugarcane based ethanol from Brazil. Now, if Ethanol is good. Sugarcane is three times as good as corn, from an energy production standpoint, but it happens to come form Brazil and we happen to want to help our farmers and the people are ADMs [phonetic] of the building this ethanol machines. It is not a good answer for America from the environmental perspective, from an energy perspective, form a water perspective would nobody talks about, we all talk about CO2, we have got to start talking about water, which is a much more precious resources than CO2 and the other thing is we got to get away from New York times, get away from CNN, being our only source of information for real science is we have to deal into something, get a hold in the department energy recent report on energy, that tells all of us by 2030 best gas, no matter what the heck we do, we will need 25% more conventional fuels. What that tells me is as you are building towards the future don’t forget the short term, because at the end of the day you will paying three times as much for gasoline, if you are to get the short term. So, instead of doing economics one-on-one, our legislators would like us to actually create a situation where you actually restricting conventional fuels for you are building towards the futures of your car kind of black hole, global warming a serious issue, CO2 emissions by man made sources are cannot possibly be good, all of us had to do everything we can. We have got us talking more about conservation. How many times do you and I walk out of hotel room without turning off all the lights. I for the last year and half, I have done that every time I go out of a hotel room, I do the same in my house, it is when I started approaching $70 and I said I got to start being more efficient, but we don’t talk about stuff like that, that is a horrible waste of energy, that is the quickest and easiest way to actually balance energy supply and demand, but then lets get after on all fronts, make sure that we get all diversified. So, we don’t bet on anyone fuel as being the some sort of novena or silver bullet, because there isn’t one and it is going to take us 50 years to get to a place, were we are going to be happy with solution and then we figured out a way the grow energy usage even more, but we are actually reserving human history by taking more intense fuels that can actually generate more energy from smaller volume and actually go in the other direction, with a widely collected and widely distributive things like corn based Ethanol, it makes no sense.
Recorded On: 3/24/08