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Former Shell exec: Politics hurts search for energy solutions

Former Shell exec: Politics hurts search for energy solutions

By KRISTEN HAYS Houston Chronicle Copyright 2008

SHAWN GUST COEUR D’ALENE PRESS FILE: John Hofmeister, former president of Shell Oil Co., speaks earlier this year during an energy conference in Idaho.Aug. 18, 2008, 5:33PM

Politics and energy go hand in hand, but often to the detriment of Americans who want solutions and get only “partisan paralysis,” former Shell Oil Co. President John Hofmeister said today.

Hofmeister joined several other energy executives and experts at an energy policy forum in Houston sponsored by U.S. Rep. Kevin Brady, R-The Woodlands.

Having retired from Shell last month, Hofmeister founded a nonprofit policy advocacy firm, Citizens for Affordable Energy, to promote comprehensive, non-partisan policy to shore up the nation’s energy security.

“The politicization of energy is only beneficial to those running for office,” leaving Americans listening to debate that rarely produces effective policy, Hofmeister said.

“If our national leadership cannot come to grips with a problem of this severity, there’s something wrong with the process and the people,” he said.

Issues that get mired in political back-and-forth, forum participants said, include expansion of offshore drilling to areas currently off limits and construction of new transmission lines across states to handle more wind and solar electricity generation.

Amy Myers Jaffe, an energy fellow at Rice University’s James A. Baker III Institute for Public Policy, said the nation’s energy security remains an urgent issue even though crude has fallen more than 20 percent in recent weeks from a high near $150 a barrel and gasoline has dropped from more than $4 a gallon.

On Monday, light, sweet crude for September delivery closed down 90 cents at $112.87 a barrel. Regular gasoline sold for an average $3.74 a gallon nationwide, down 35 cents in the past month, AAA reported. The average in Houston was $3.54, compared with $3.96 a month ago.

The U.S. reacted to the higher prices earlier this summer in part by reducing demand. Last week the Federal Highway Administration said U.S. drivers were on the road in June for 12.2 billion fewer miles than a year ago, a 4.7 percent decline.

“Every time the price drops, Americans just say, ‘OK, the problem is solved,'” Jaffe said. “Just having prices ease up a little bit at the pump did not solve the problem.”

She noted that prices reached this year’s highs without significant disruptions of supply from the Middle East or Russia.

If drivers react to the recent softening of prices by falling back into old driving patterns, “we’ll be right back to the pump price that made you uncomfortable originally,” she said.

Brady added that growing global demand and tight supplies continue, and that other factors contributed to the recent softer prices. These include a strengthening dollar, speculation and market reaction to the slowing U.S. economy.

“The price drop doesn’t change the fundamental problems” of U.S. dependence on foreign oil, growing demand in burgeoning economies such as China and India, tight supply and falling production.

Hofmeister said the debate over expanded exploration and drilling in offshore areas currently off limits has prompted opponents to say the nation can’t “drill its way out of this problem,” a position he said “does a disservice to the American people.”

He noted that the massive transportation industry relies on oil, from trucking and airlines to personal vehicles and shipping. Also, oil is so ubiquitous that it’s in asphalt, building materials such as shingles, cosmetics, plastics and other materials people use every day.

A longtime advocate of energy policy that promotes a wide variety of energy sources, from oil and gas to hydrogen, biofuels, wind, solar and nuclear, Hofmeister said the nation can’t just switch from petroleum. Infrastructure must be built to support it, such as gasoline stations with new storage tanks that hold compressed natural gas for gas-fired cars or E-85 pumps for gasoline that is 85 percent ethanol.

“It’s in the infrastructure of your daily life,” he said of petroleum. “It’s unrealistic to suggest that alternatives are right around the corner when the infrastructure is not there.”

Alternatives will likely start replacing oil and gas over the next two decades, Hofmeister said.

“That’s different than a two- to four-year election cycle,” he said.

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