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RIGZONE.com: Drilling Demand: Shell Exec Says Curbs Hurting U.S.

By  Jason Womack     
Tulsa World, Okla.     

The president of Shell Oil Co. called for fewer drilling restrictions along the continental shelf and on federally owned lands Wednesday as a means of reducing U.S. dependence on foreign oil.

During a presentation in Tulsa, John Hofmeister told hundreds of energy and other business professionals that increased exploration in these historically protected areas would more than meet the nation’s oil demands.  

But while such drilling could eliminate America’s need to import 65 percent of its oil, it alone would not ensure the country’s energy security, Hofmeister said.

“Energy security keeps me up at night,” he said during his speech at the Tulsa Renaissance Hotel and Convention Center.

Hofmeister contended that the country has become acclimated to increasing energy prices without developing its own natural resources. The U.S needs to meet increasing energy demand with a mix of solutions, technology and education, he said.

Alternative fuels, wind energy, natural gas and coal are part of the solution, he said, but he also envisions a framework where greenhouse gases are reduced, children are educated about energy and conservation is commonplace.

“Demand needs to be recognized at the same time as supply,” the Houston-based executive said.

The speech, given as part of the Tulsa Business Forums, touched on subjects that were addressed throughout the day by industry leaders during an Oklahoma State University-sponsored event, “Energy Conference: On the Road to the Future.”

The conference featured more than a dozen speakers drawn from Oklahoma energy companies and state and federal government offices to address topics affecting the energy industry such as the environment, energy supply and alternative fuels.

Many of the speakers recognized that as China and India continue to industrialize, tensions related to energy supply and demand will increase.

Thomas Kivisto, president and CEO of Tulsa-based SemGroup LP, pointed out that global supply for oil is 2 percent above global demand and that refinery capacity is 4 percent above demand.

“Crude oil has no value,” he told conference attendees during a morning presentation. “You can’t eat it. You can’t put it in your car. You have to refine it.”

He said refinery capacity could become more important than supply.

Hofmeister suggested that ethanol may provide some of the solution because the fuel represents a “a way to take pressure off the refinery capacity.”

Shell Oil, the U.S. subsidiary of Europe’s Royal Dutch Shell Group, has concentrated its biofuel efforts on ethanol developed from plant waste. Eventually, Hofmeister said, ethanol could replace 15 billion to 16 billion gallons of fuel per year.

He said U.S. energy security presents challenges. But the convergence of technology, public policy and commercialism within the industry holds great opportunity.

“I wish I was 20 years younger,” Hofmeister said. “The exciting future is just beginning.”

Copyright (c) 2007, Tulsa World, Okla. Distributed by McClatchy-Tribune Business News.

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