The New Shell Answer Man

June 18, 2007 — -- When the price of gas rises from the day before -- an "up" day -- it seems that all the media outlets are saying the same thing. "Pain at the pump" is the mantra du jour when talking about oil prices these days.

Dissatisfied consumers are certainly feeling that pain -- wouldn't you like to say a thing or two to an oil executive?

You may get your chance. John Hofmeister, the president of Shell Oil in the United States, is touring America to go face-to-face with the gas-buying public. He's hitting 50 cities on his tour, and consumers aren't pulling any punches.

Watch the full story tonight on "Nightline" at 11:35 p.m. EDT

'Lived in a Bunker'

"The oil industry has a terrible, terrible image issue that we have to correct" because it has "lived in a bunker," according to Hofmeister.

Indeed, this is a phrase -- a talking point -- that comes up often in Hofmeister's well-polished speeches. There's a lack of credibility between gas-buyers and those that supply gas and oil, he said.

"The public doesn't know us," Hofmeister explained. "The public doesn't like us. The public doesn't trust us."

So Hofmeister has come out of the bunker. And it's a novel move for a CEO: traveling the nation, taking unscripted questions, and soliciting opinions and criticism from sundry groups of invited Americans.

The guest list, while not random, isn't entirely predetermined either. For example, in Jacksonville, Fla., the public relations firm Bursten Marsteller was asked to search the community to find a number of people -- a third from the business field, a third from government, and a third from the community at large -- to hear from Hofmeister.

In Jacksonville one such group (treated to an open bar) seemed charmed by Hofmeister; a guest even said, "He seemed like he would be good with his grandkids," and was even more charmed to hear a CEO for a major oil company speak with a frankness that seemed almost risque.

The Answer Man

This is a drastic change from the way things used to be done at Shell. The company used to run commercials with a fictional character called the Shell Answer Man, who would provide some scripted talking points. But the point was obviously to sell Shell gasoline -- and that's a trait shared by Hofmeister.

Hofmeister said the information they obtain from these events is fed back through the chain of command at Shell to gauge concern about different issues. It's important for people to like him because "it's still a free market. They could choose Shell, they could choose one of our competitors. I think it is about market share. It is about trusting the brand that you choose to put in your tank."

Knowing that the public thinks the oil industry is ripping them off, Hofmeister has the slippery job of explaining the industry's profits -- specifically, where they are going.

For example, in 2006 Shell reported $25 billion in profit, undoubtedly a high number. But that's a percentage of total sales, an average "between seven and eight percent," Hofmeister explains. "You know, banks and pharmaceuticals, they make a lot more profit on a percentage basis."

That doesn't stop consumers from hearing those big numbers, and seeing red. Hofmeister breaks down the numbers for his audiences, explaining that after what's invested back into future growth, taxes, and what goes to shareholders, it's pensioners who are really profiting.

Some people, however, aren't buying this explanation. U.S. Rep. Corinne Brown, D-Fla., was at the gathering in Jacksonville, and it was no-holds-barred. "'What's up with the growing prices?' That's what they say to me. So I'm asking you, what's up?!" she demanded.

Hofmeister remained cool throughout, saying that global warming is real and Shell should lead the way in possible solutions. There's plenty of oil in the world to go around, he said, if the company is allowed to drill and build new refineries.

"We know there's 110 billion barrels of oil and gas that we know is out there," Hofmeister said. That's 30 years of production that he said is off limits to American companies. The catch? Much of that oil lies under U.S. coastal waters, and companies aren't allowed to drill to protect the shores from coastal spills.

Hofmeister said, "Drilling off the coast is a controversial issue. No question about it. But let's be clear: Technology has moved on. Technology has created the solution. We know a hurricane is coming, we shut down production." But he admitted that there are no guarantees, and Shell can't control nature.

Despite the controversial issues and the tough questions, this oil executive seemed to make some friends in Jacksonville -- city No. 36 on his tour -- and he's got 14 more to go.