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The Salt Lake Tribune: Shell boss stumps for off-shore drilling

In Salt Lake City, he says development is a must to meet needs
By Steven Oberbeck

Shell Oil president John Hofmeister says it is possible for this country to approach energy independence but to do so it must embrace new fuel technologies and rethink existing policies preventing additional oil and gas development.

    Hofmeister was in Salt Lake City last week as he neared the tail end of a 50-city “listening tour” to address the public’s growing frustration and concern with high energy and gasoline prices, and record oil company profits.

    He used the occasion to contend that there is an abundance of oil and gas resources available but public policy has declared it off-limits, noting that 85 percent of the outer continental shelf holding more than 100 billion barrels of oil and gas is closed to off-shore drilling.

    “Right now, 66 percent of our daily [oil] consumption comes from imports, while we’re refused the opportunity to develop our own resources,” Hofmeister said. “And in denying access, it is causing us to be more dependent” on foreign sources of oil.

    While acknowledging consumers’ anger over oil company profits, he argued that Shell is making good use of that money. Shell Oil’s parent company, the Hague-based Royal Dutch Shell, reported in late July that its income rose 18 percent in the second quarter of this year, to $8.7 billion, compared with $7.3 billion a year earlier.

    The company said the increase primarily was linked to asset sales and strong earnings from its oil refining operations, which saw earnings jump to $3.9 billion from $3 billion in the same quarter of the previous year.

    Hofmeister said that Shell Oil is investing record amounts into its system and is considering a major expansion of its refinery operations in Texas.

    Yet in order to reach energy security, which he defined as “available and affordable energy for as far into the future as anyone can envision,” Hofmeister said the nation also must develop a range of alternative-fuel technologies from biofuels to wind power.

    The company is investing heavily in technology that eventually could lead to the development of oil shale, hydrogen fuel cells and wind energy.

    It is shying away, though, from corn-based ethanol production because of the potential impact it could have on food prices. “We’re often attacked for high gasoline prices and really don’t feel like being attacked for high food prices, as well,” Hofmeister said.

    Instead, Shell is working to develop technology to produce ethanol from plant cellulose.

    Hofmeister, who was named president of the Houston-based Shell Oil in March 2006, said the company believes that dealing with global warming is an issue it must address.

    Although acknowledging that much of the nation’s energy needs in the future will need to be addressed with oil and gas that will produce a ”carbon management issue,” he said that is something the company would like the opportunity to help solve.

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Article Last Updated: 09/04/2007 11:27:47 PM MDT

http://www.sltrib.com/ci_6803116

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