Question: What woudl $120 barrel of oil mean for the US economy?
Jim Hackett: It probably means somewhere around $4.50 gasoline for one which is not great. It means Jet fuel is more expensive, it means diesel fuel is more expensive by a similar factor and so it is a bad answer. The reason isn’t a single oil company out there that wants oil to trade over $100 a barrel, I assure you. Our competitive position in the world as much stronger, whether it is Anadarko, whether it is Exxon Mobile as a $50 oil environmental that it is at $120, because everybody in the bother thinks they know what to do when $120 oil countries think that are good, not just lucky, they end up doing things that not necessarily the most efficient, for the most practical or the most technologically smart to do. Reservoirs aren’t drained properly. So nobody, nobody hopes for this at least, I am aware of the industry we are in, we don’t think it is good for the world economy. The world economy absolutely still grows more slowly at that level, but also if we go back to late 70’s, which is the only analog for this period, we know that the world economy can grow to $120 a barrel. Now that isn’t necessarily good that it can do that, just means that it won’t get quashed. So, what you are really look at for something that you are really appoint that really be disruptive would be terrorism events which actually shut off certain supplies, legislation in the global climate change that would actually shut down the effective use of conventional supplies or a war or some sort of pandemic reaction of what it allow us not go, would not allow us to go into those areas where you can find resources, those would be the things that we do it. I don’t think any of those necessarily likely, I actually in very hopeful about market forces gradually moving us off of conventional fuels and another wonderful innovation of some sort that combines with nuclear energy that actually gets us to the next level of energy consumption.
Recorded On: 3/24/08