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New Orleans City Business: Shell president: Energy crisis ‘one hurricane away’ in U.S.

Hofmeister hits 50 cities to bolster oil industry image
By Emilie Bahr
September 24, 2007

One major storm will equal one major economic headache for the United States, according to a top Shell Oil Co. executive.

The United States must expand domestic oil and gas production while developing renewable sources and energy-efficient technology to secure its energy supply, according to John Hofmeister, the Houston-based president of Shell Oil Co.

Hofmeister’s stop Tuesday at a lunch at the New Orleans World Trade Center’s Plimsoll Club was No. 44 in a 50-city tour, said Shell spokeswoman Darci Sinclair. She said the tour is aimed at countering negative images about the oil industry and raising public awareness of the issues affecting the energy sector.

“We are one hurricane away from energy scarcity and volatile, high prices,” Hofmeister said a day after crude oil prices topped $80 — a record, unadjusted for inflation. “We are so tight on the demand-supply relationship.”

Americans for the past half-century have largely enjoyed a lifestyle based on the availability of cheap, abundant energy, Hofmeister said. As demand for energy has grown — the nation today consumes 10,000 barrels of oil per second, he said — its “energy security” has been compromised, he said.

“We have seen our country pass, in my opinion, a tipping point of energy supply keeping up with demand,” Hofmeister said.

Today, the nation produces only about one-third of its oil and gas, importing more than 60 percent of the energy required to meet daily demand, he said. The short-term solution, Hofmeister said, is tapping into tremendous unexploited U.S. energy reserves, many of which are now off limits.

Policy changes are necessary to promote an energy security agenda, Hofmeister said.

Only 15 percent of the Outer Continental Shelf sea surfaces off the nation’s coast under federal control are open for minerals extraction. Hofmeister said more than 1 trillion barrels of hydrocarbon could be produced from oil shale found in places such as Colorado, Utah and Wyoming.

Hofmeister called for augmenting the natural gas supply, which he said is now “stretched,” through development of liquid natural gas and coal gasification technologies.

Long term, Hofmeister said renewable fuel sources, including solar, wind, bio-based fuel and hydrogen technology, will provide a significant percentage of the nation’s energy portfolio. But while such green technologies will provide a major fuel source for the future, Hofmeister cautioned against rushing the process too quickly.

He said recent federal energy legislation has focused too much on longer-term energy concerns while lacking short-term supply solutions.

Hofmeister has long promoted energy conservation and warned of global warming. He said “the debate on climate change is over.”

Hofmeister said the country would benefit from an emissions cap and trade program to allow major polluters to sell greenhouse gas credits, a program he said would ultimately convince industries to implement less-polluting practices.

Hofmeister said a national emissions standard is in order as states begin implementing their own greenhouse gas emissions standards to ensure standardization.•

http://www.neworleanscitybusiness.com/viewStory.cfm?recID=20335

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