Politics Roil Oil

It's time for a reality check: Politics and business don't mix, and that is especially true if you are in the energy business today.

There are claims that energy industry executives "lied" when they testified before Congress last week, and that has Democrats smelling blood. The claim is that at least two companies, Exxon Mobil(XOM Quote) and ConocoPhillips(COP Quote), had officials participate in the now-infamous 2001 Cheney Energy Task Force. Both companies' executives testified before Congress last week that they were not involved in the proceedings.

And, moreover, Sen. Barbara Boxer (D., Calif.), claims that Shell Oil(RDS.A Quote) President John Hofmeister was not truthful about the company's decision to shutter its refinery in Bakersfield, Calif.

There is now chatter that the executives should be dragged back to Washington, shackled and forced to sit through another six hours of questions from senators who have only one item on their agenda: find a way to blame these executives for every worldly ill, all of which, of course, are the result of higher oil and gasoline prices.

Headline Risk

All that said, this site isn't about politics, it's about the markets and how to make money. But politics have now created substantial risk for Big Oil, so the twain must meet.

There is little chance that a major punitive tax on energy companies will work its way through Congress. And there's even a smaller chance that such a tax would be signed into law by a president who made much of his fortune in the oil patch. Still, the rhetoric is likely to continue, and likely at a higher decibel level, which doesn't bode well for the major oil companies.

Both Lee Raymond of Exxon Mobil and Jim Mulva of ConocoPhillips indicated their companies were not involved with the Cheney Task Force. While technically correct, an Exxon government affairs official did meet with the head of the task force. And while Jim Mulva would have no reason to know, former Conoco CEO Archie Dunham and other Conoco execs appear to have been involved in some way with the task force before Mulva's company, Phillips Petroleum, merged with Conoco.