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El Paso Times: President of Shell Oil urges more oil drilling

By Vic Kolenc / El Paso Times
Article Launched: 07/21/2007 12:00:00 AM MDT

The United States is living on the “knife’s edge of a (energy) shortage,” but the country has plenty of energy sources for the future if Congress and other policymakers open more areas to oil drilling and provide incentives for developing other forms of energy.

That’s what John Hofmeister, 59, president of Houston-based Shell Oil Co., the U.S. arm of Royal Dutch Shell, told a group of El Paso business people Friday. Forbes ranks Royal Dutch Shell as the world’s third-largest company by revenues.

“Are we running out of energy? Not at all. That’s the good news,” Hofmeister said during a luncheon speech. “Why is it not more available? That’s the bad news,” and is tied to the lack of proper public policy for energy development, he said.

Hofmeister was in El Paso as part of his yearlong, 50-city energy-education tour. It’s aimed at improving the public’s unfavorable view of the oil and gas industry, and to get the public to better understand energy issues. He spoke at a Greater El Paso Chamber of Commerce luncheon and also had a town-hall meeting at the University of Texas at El Paso.

More offshore areas of the United States and more federal land need to be opened to oil drilling, Hofmeister said. Oil sands, oil shale, coal gasification, liquefied natural gas, biofuels, hydrogen fuel and windmills are less conventional but plentiful forms of energy that can be developed with government incentives, he said. Shell has projects in all those energy forms.

“There are 2 trillion barrels of unconventional oil and gas reserves locked in oil sands in Alberta, Canada, and in oil shale in Colorado, Utah and Wyoming,” Hofmeister said to give examples of where future energy supplies could be found.

Steve Thomson, an advanced engineering manager at the Delphi Mexico Technical Center in Juárez, said he agreed that plenty of energy was available, “but it’s always a matter of how much you’re willing to pay to process that energy.” Thomson said he had been unaware of the amount of oil and gas available “right off our coasts.” He agreed that more offshore areas should be opened to drilling.

El Paso Electric CEO Ershel Redd Jr. said he was disappointed that Hofmeister didn’t talk about the need for energy conservation to help solve the nation’s energy problems.

“He wants to change public policy to open new lands for exploration,” Redd said. “But those supplies also are finite. We need to figure out how to use less (oil and natural gas), and take cars off the street and (use) more mass transit.”

Redd agreed with Hofmeister that the United States should do more to use its plentiful coal supply. “We have 250 years of coal reserves in this country,” Redd said. It will cost more to use it, “but we have to do it.”

Sleida Viramontes, who works for Gail Darling Staffing, an El Paso employee staffing firm, said Hofmeister’s speech left her with a lot of questions about the oil and gas industry, especially why gasoline prices vary so much by city.

Hofmeister told news reporters later that gasoline prices are high simply because demand is outstripping supply. A change in public policy could allow the building of more refineries in the United States, he said. Shell and other companies are expanding existing refineries because that’s easier than building new ones, he said.

Hofmeister blamed the oil and gas industry for not better explaining energy issues to policy makers and the public. “Informed people choose best,” he said.

Vic Kolenc may be reached at [email protected], 546-6421

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