May 7, 2008 in Idaho

Shell exec blasts excessive oil use

By The Spokesman-Review
 
The Spokesman-Review photo

Hofmeister
(Full-size photo)

Americans are so addicted to their comfortable lifestyles that even $120 per barrel oil is unlikely to change their behavior, Shell Oil Co.’s president said Tuesday.

“Who wants to sit in a mega-mansion at 75 degrees when you have the ability to turn the air conditioner to 72 degrees?” John Hofmeister said during an appearance in Coeur d’Alene.

“Every second of every minute, this nation consumes 10,000 gallons of oil,” he said. “That’s a backyard swimming pool full of oil.”

In addition, the nation burns 20 railcars of coal per minute, and 60 billion cubic feet of natural gas daily.

“Energy is the source of the lifestyle we love in this country,” Hofmeister said.

With such a vast appetite for resources, the U.S. must seize control of its energy future, he said.

As oil futures surged to a record $122 per barrel Tuesday, Hofmeister offered a broad array of solutions for addressing the nation’s energy needs, including more domestic oil drilling, a focus on alternative fuels and carbon caps to address global warming. He was the keynote speaker at the National Association of Attorneys General conference at the Coeur d’Alene Resort.

Hofmeister, who is retiring from Shell, sometimes gets accused of sounding more like an Earth Day presenter than a Big Oil executive.

As far as Shell is concerned, he says, the debate over global warming is over – arguing only delays the inevitable and increases its cost.

Shell wants the federal government take the lead in setting caps on the greenhouse gases associated with global warming, instead of states adopting a patchwork of regulations. The company’s also investing in alternative fuels, including wind energy and ethanol from plant wastes, algae and sawdust.

And Shell, which supplies 14,000 U.S. gas stations, also supports increased fuel efficiency standards for cars and trucks.

But Hofmeister was also on the defensive Tuesday, criticizing politicians who “vilify big oil for reaping excessive profits.” Shell’s parent company, Royal Dutch Shell, earned a 7 percent profit during the first quarter, which is modest for many industries, he said.

He also criticized U.S. energy policy, saying the nation hasn’t had a coherent policy since World War II, when the strategy was to produce as much energy as possible and ration it to consumers.

Hofmeister said reliance on foreign oil has been exacerbated by blocking coastal areas and federal lands from energy development. This week, Alaska Native groups challenged Shell’s permits to explore for oil and gas in Arctic waters by using acoustic vibrations. The suit said the vibrations could harm marine mammals.

“The U.S. prohibits access to its own natural resources,” he said. “… We need more oil and gas, whether it’s on-shore Alaska, or off-shore Alaska.”

Hofmeister also touted the enormous energy reserves in Alberta’s oil sands and the oil-rich shales of Colorado.

That prompted Rob McKenna, Washington’s attorney general, to ask about the resources needed to extract that energy.

“We need to put energy into getting energy out,” Hofmeister said. But if it could be done by wind power, the energy extraction wouldn’t leave a carbon footprint, he said.

McKenna later said that Hofmeister captured the complexities surrounding energy issues.

“We won’t move off a hydrocarbon-based economy overnight,” McKenna said. However, with $4 per gallon gas on the horizon, alternative fuels become more economical, which helps lower carbon emissions as well, he said.


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