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Douglas A.

Grandt

PO Box 6603
Lincoln, NE 68506
(510) 432-1452
May 29, 2015

Senate Committee on Energy and Natural Resources


304 Dirksen Senate Office Building
Washington, D.C. 20510
Re: Oil Refining - Considering future eventualities versus the myopia of the present (letter #13)
Dear ENR Staff,
I am gravely concerned for the U.S. economy and social stability in the plausible event that oil
companies become unprofitable and are forced to close down operations as a result of cash
flow and insolvency issues that result from sustained low price levels for petroleum (crude oil).
What I fear is an unexpected (if not unforeseen) scenario in which financial strength of large oil
companies declineinsufficient to buy the assets of failed companies, leaving a precipitous
gap between supply and demand of fuels. Their financial stability is already at a cross-roads.
For the sake of national security and true energy independence, we need to be watchful and
safeguard the vitality of U.S. oil companies as national resourcesas national treasures.
We must assess the likelihood that U.S. oil companies will remain in business as the global
price of crude oil remains low in a worst case scenario. We must prepare for the eventuality
that an economic house of cards could come crashing down, taking stock markets down in a
general panic as happened in 2002 and 2008. Pensions and life-savings are in jeopardy for
people in all demographics if a collapse of the oil production and refining industry were to occur.
The oil companies have economic models, which have the capability to evaluate and plan for
what if scenarios. I believe that it would be in the national interest for the Senate Committee
on Energy and Natural Resources to understand the sensitivity of each oil companys business
plan to sustained low crude oil prices, and to assess the downside potential destruction to our
economy in the worst case scenarios of plausible worldwide oil market environments.
In the public interest, I ask the ENR Committee to convene a series of hearings for the purpose
of investigating U.S. petroleum production and refining corporations in depth as to how they
envision sustaining operations while profitability wanes and insolvency spreads. How do they
envision winding down operations as they struggle to fulfill their fiduciary duty to investors when
prudent businessmen would be curtailing unprofitable operations. Such scenarios are plausible
and we must prepare to respond in order to avert the devastation of the worst case scenarios.
Therefore, please call upon Chevron CEO John S. Watson, ConocoPhillips CEO Ryan Lance,
Enterprise Products CEO, Michael A. Creel, ExxonMobil CEO Rex W. Tillerson, Flint Hills
Resources CEO Bradley J. Razook, Hess CEO John B. Hess, Marathon CEO Lee M. Tillman,
Murphy Oil CEO Roger W. Jenkins, Sunoco CEO Robert W. Owens, Tesoro CEO Gregory J.
Goff, Valero CEO Joseph W. Gorder, World Fuel Services CEO Michael J. Kasbar, and others
as may be required to get a diverse assessment of the entire spectrum of the industrys vision.
Sincerely yours,

PERSONAL

Doug Grandt

answerthecall@mac.com

SENATORS EYES