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Shell Oil boss calls for new energy policy

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delawareonline: Shell Oil boss calls for new energy policy

BY ANDREW EDER • THE NEWS JOURNAL • MAY 7, 2008

The United States needs a comprehensive energy policy that includes tapping into domestic oil sources and capping carbon dioxide emissions across the country, a top oil company executive said this evening at the University of Delaware.

On a day that oil futures touched a record $123 a barrel, John Hofmeister, president of Shell Oil Co., the U.S. division of Royal Dutch Shell, said oil companies need to find “unconventional” sources of oil as existing sources dry up.

The U.S. government should lift its 30-year moratorium on most domestic oil exploration to ease the country’s reliance on the Organization of Petroleum Exporting Countries, or OPEC, Hofmeister said.

“If we’re only allowed access to international sources, guess what’s going to happen to the price of oil?” he said. “It’s going to continue going up.”

Hofmeister, who plans to retire in June after three years as the head of Shell, spoke to a packed auditorium at Mitchell Hall as part of UD’s Global Agenda 2008 program. He laid out Shell’s 12-point plan for “energy security,” which includes cleaner power from a technology called coal gasification, more emphasis on non-corn-based biofuels, encouraging technological solutions for managing energy demand and increasing investments in natural gas, wind, solar and hydrogen power.

Hofmeister also called for the U.S. to implement a cap-and-trade system to control emissions of carbon dioxide, which many scientists blame for global warming.

Hofmeister said the supply of “easy, convenient oil” is peaking, but more oil remains to be tapped in sources like oil-rich shales in Colorado and oil sands in Canada. The U.S., he said, guzzles 21 million barrels of oil each day – or about 10,000 gallons per second.

“That’s a backyard swimming pool full of oil gone every second,” Hofmeister said.

Largely ignored Wednesday were the record profits that oil companies have tallied during the run-up in oil prices. Shell, which supplies gasoline to nearly 14,000 U.S. stations, earned $7.8 billion in the first quarter of 2008, up 12 percent from the same period in 2007.

Today, Senate Democrats called for a temporary tax on “windfall” oil company profits and a rollback of $17 billion in tax breaks for the oil industry. Hofmeister did not address the proposal, but he did lament the “paralysis of partisanship” that has prevented the U.S. from developing an energy security strategy since World War II.

Hofmeister said higher oil prices would likely curb U.S. demand, but he couldn’t say when. In the last two years, Hofmeister said, he has visited 50 major American cities, and one thing has been clear.

“Americans,” he said, “are not interested in dramatic changes to lifestyle.”

Contact Andrew Eder at 324-2789 
or [email protected].

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