April 12, 2007

Oil Executive Predicts Future Energy Crisis

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“I would submit to you that your lifestyle, your career, will depend upon energy security. Not just now, not just in a few years, but as we look out ahead over the decades: your career, your economic wellbeing, whatever course you may take in life … Energy security will touch you,” began John Hofmeister, president of Shell Oil Company, at his on-campus lecture yesterday.
Entitled “How the U.S. Can Ensure Energy Supply for the Future,” Hofmeister’s presentation addressed the role of American public policy in attaining energy security amid an impending energy crisis. Shell Oil Company, a longtime world leader in gasoline and oil retailing and production technology, is actively pursuing a solution to the world’s forthcoming depletion of energy resources.
Hofmeister said that an example of how “marginal the supply-demand relationship is on something as fundamental as gasoline” is the hurricane season of 2005. Devastated by Hurricanes Katrina and Rita, the entire southeast coast of the United States nearly experienced power outage when refinery production came to a halt. With twelve hours to spare before coastal energy shortage, emergency power sources saved production.
What separates people around the world “from available and affordable energy,” Hofmeister said, “is public policy.” Following his claim that individual lifestyle, in addition to modern economy, is dependent on energy availability, Hofmeister’s vision for Shell and for the world is both gradual transition to new and different energy sources and a change of heart within political arena.
While Shell has already begun investigation into alternate energy sources ranging from coal gasification and thin-film technology to wind power and hydrogen fuel cells, Hofmeister acknowledged the decades it will realistically take to alter such a fossil-fuel-ingrained existence. Not only does new technology remain in its infancy, but markets are not developed to pay for such technologies — particularly when many alternate sources of energy are not abundantly available.
Defining energy security as “reliable and affordable energy to met the needs of society from now until every generation that we can conceive of in our imagination,” Hofmeister recommended a solution to the lack of alternate energy sources in the form of policy change.
“We have now faced two years of, frankly, unacceptable high price and unnecessary high price because energy demand continues to exceed energy supply … We can get angry, or we can change public policy,” Hofmeister said.
Functioning as an oppositional force in making more energy available, Hofmeister said that policy is what prohibits energy companies from accessing some of the continent’s lesser-known sources. Unconventional solid forms of gas and oil, for instance, are available but not accessible in the massive rocks of Colorado and mid-western America. There exist 110 billion barrels of ready-to-produce oil and gas in the United States alone — enough for over thirty years of oil and gas production — that are banned from industrial use.
Regardless of the outcome of the energy issue at hand, Hofmeister said that the Shell Oil Company foresees two major changes: energy efficiency and energy education. With hope for the technologists of tomorrow, the company aims to “extract greater energy” from existing sources using “less per unit of input per unit of output of energy.” In addition, Hofmeister stresses reaching out and teaching consumers, students and society as a whole. In his eyes, “there is no silver bullet for energy security.”