Oil executive’s illness limits Obama’s exposure in Brazil to oil-drilling hypocrisy

Neil Munro White House Correspondent
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A well-timed bout of illness by an oil-industry executive reduced President Barack Obama’s exposure to embarrassing media questions about the president’s simultaneous support for oil drilling off Brazil’s coast and opposition to oil drilling off the coast of the United States.

The suddenly stricken CEO, James Hackett, heads exploration-giant Anadarko Petroleum Corp. He was appointed by the president in 2009 to the Commerce Department’s United States/Brazil CEO Forum, which played a prominent role in the president’s March 19-20 trip to Brazil.

“Unfortunately, Mr. Hackett was ill the day the meetings started and was unable to attend,” according to a March 22 company statement.

White House officials announced March 19 that Hackett would be among the 20 CEOs meeting with Obama and Brazilian President Dilma Rouseff. His presence at the summit would have been a gusher of drama for the media traveling with the president, because his company is entangled in several high-profile political controversies.

Anadarko is a leading energy-exploration company and has discovered huge oil and gas fields in the waters off Ghana, Mozambique and Brazil. This work creates many jobs for U.S. workers and promises much wealth for Americans’ mutual-funds — the company is worth $40 billion on Wall Street. It also helps provide cheap gasoline for U.S. drivers and an improved economy, which ultimately helps the re-election prospects for incumbent politicians.

But the company’s new energy-discoveries also make it a potential rhetorical target for the White House-backed coalition that wants huge federal subsidies for renewable-energy companies and increased taxation of oil companies.

The company’s vulnerability to this coalition was increased last spring, when BP’s Deepwater Horizon drilling operation exploded, producing a media frenzy, a massive oil leak, an uproar by Democratic-affiliated environmentalist groups, a political headache for Obama, and a clampdown on oil drilling in the Gulf region. Anadarko owns 25 percent of the Macondo oil field that was being opened up by BP’s drilling rig, and the subsequent regulatory clampdown prompted it to cancel three lucrative oil-drilling operations in the economically hard-hit Gulf region.

The potential for unwelcome political controversy was illustrated March 21 by the president during a business summit in Brazil where he simultaneously praised the oil discoveries while subtlety criticizing oil companies for creating safety risks. “By some estimates, the oil you recently discovered off the shores of Brazil could amount to twice the reserves we have in the United States,” the president said. “We want to work with you. We want to help with technology and support to develop these oil reserves safely, and when you’re ready to start selling, we want to be one of your best customers,” he said to applause from the mostly Brazilian audience.

In contrast, President Obama has maintained tight restrictions on energy-discovery in the United States, and also blamed the oil companies for high gasoline prices. At a March 17 press conference at the White House, the president said recent gasoline price-increases in the United States were painful for voters facing long-commutes, and suggested that oil companies may be gouging consumers and also boosting prices by not drilling at sites approved by the federal government.

Because of their political weakness, oil-industry officials have mostly kept their silence about this two-sided policy. But some of the industry’s advocates in Washington are open in their criticism. The Offshore Marine Services Association (OMSA), for example, has challenged the White House in courts and in the media. “President Obama says he has lifted the moratorium on oil drilling in the Gulf of Mexico, but he’s not telling the truth…[instead, he] wages war on domestic energy exploration and development,” says an association statement.

WATCH: OMSA-created video on the harm they say the president’s oil-drilling moratorium is causing

“I was fascinated that he would go to Brazil, proclaim that he was extremely excited him about the discovery of oil in the seas off Rio de Janeiro, [while being] opposed to North American energy development,” said Dan Kish, a senior vice president for policy at the D.C.-based Institute for Energy Research.

Obama “is celebrating the fact that they’re finding oil [off Brazil], which he won’t let us do here,” he said.

But this contradictory stance has a political logic. The White House can simultaneously constrict domestic-production and also support overseas oil-drilling because Brazil’s energy success does not significantly threaten the Democrats’ domestic coalition of U.S. environmentalists and renewable-energy venture-capitalists and companies, said Kish. Domestically, the Democrats’ primary goal for the oil-industry is not the discovery of new energy supplies, but is to make the industry’s executives submit to Washington’s direction, he said.

Those executives include Hackett, who is also a board member of Halliburton, an oil-sector company that is reviled by many Democratic activists, partly because it was once headed by former Vice President Dick Cheney.

Administration officials, Kish said, “basically want to make these guys heel,” and submit to Washington’s leadership.

If Hackett did skip the meetings with a declaration of illness, “it would be rational,” said Kish. “The administration has been anti-oil, and anti-domestic energy production from before Obama took office,” Kish said. “Anyone in the oil business understands that the only way to curry any favor with this administration is to occasionally play ball with those who are seeking to ruin the business,” said Kish, whose free-market institute is funded by foundations and other donors. “We will take money from anybody, even from George Soros – he has not given any – but we will not change our free-market position based on money,” Kish said.

Anadarko’s officials declined comment on Hackett’s illness. “Anadarko has a significant exploration program offshore of Brazil, and Mr. Hackett is a member of the United States/Brazil CEO Forum,” the company statement said.