Gasoline Prices 'A Bargain' - ChevronTexaco CEO
The current average pump price "doesn't look too bad," compared to 1981, when the average inflation-adjusted prices averaged $2.79 per gallon, said David O'Reilly, chairman and chief executive of ChevronTexaco Corp.
"By historical standards, today's energy prices are really quite a bargain," O'Reilly said in a speech at the U.S. Chamber of Commerce.
The average retail U.S. gasoline price has fallen about 13 cents to $1.937 a gallon since hitting a record $2.064 per gallon in late May, according to the U.S. Energy Department.
U.S. consumers need to get used to higher prices because of soaring global demand, O'Reilly said.
"We're emerging from a period of cheap oil and even cheaper natural gas," he said. "That model doesn't exist anymore."
Rising gasoline prices helped propel ChevronTexaco's first quarter net profits sharply higher to $2.56 billion, compared to $1.92 billion one year earlier. Earnings from ChevronTexaco's refining and marketing arm doubled to $640 million in the first quarter.
The industry's surging profits and high gasoline prices recently prompted Democratic attorneys general in eight states to launch an investigation into whether big oil companies are illegally pushing up prices.
O'Reilly also said the U.S. Congress should loosen environmental standards that have discouraged building new refineries and allow more oil and natural gas drilling in places like Alaska, the Rocky Mountains and the Outer Continental Shelf.
"I would suggest that now is the time to play ball," O'Reilly said. "In the United States, that means allowing access."