President of Shell Oil blames public policy for rising gas prices and other energy woes

It's not a shortage of fuel that is pushing the price of gas toward $3 per gallon again in New York state, but U.S. public policy, said John Hofmeister, president of Shell Oil, speaking at Cornell April 11 to a full house in Olin Hall.

Addressing the subject of "How the U.S. Can Ensure Energy Supply for the Future," he said, "There is enough reliable and affordable energy to meet the needs of society from now until every generation we can conceive of in human future. What separates Americans and people elsewhere around the world from available and affordable energy is public policy."

Hofmeister, who has held key positions at General Electric, Nortel and AlliedSignal (now Honeywell International), became president of Shell Oil in March 2005. He pointed out that the 110 billion barrels of oil and gas on the continental shelf -- more than a 30-year supply of energy -- can't be accessed by oil companies because of public policy. Meanwhile, the price of gas in California has passed $3.35 per gallon.

Hofmeister noted that he is a strong advocate of developing alternative oil sources. An estimated one trillion barrels lie in the oil sands of Alberta, Canada, he said, and another trillion or so in the oil shale in Colorado. In Venezuela, there are three trillion barrels of heavy oil.

Public policy is hindering energy technology as well, Hofmeister lamented. "The U.S. has more coal reserve than the rest of the world combined," but the technology to gasify coal instead of burning it has not been adopted in the United States. In China and Europe, however, this "clean coal" technology has been working for years.

If the United States fails to build new infrastructures to support alternative fuel production, Hofmeister warned, there could be big trouble ahead.

Shell, he said, is also investing in cellulosic ethanol research, solar power, wind power and hydrogen fuel cells.

"Before we can be set for energy security," Hofmeister said, "there are three critical things that have to happen." First, there has to be a "regulatory push" for energy efficiency -- unless public policies promote the building of new infrastructures and investing in technology, efficient energy will never be practical. "Any form of energy needs to be commercial," he said.

Second, Hofmeister said that "there should be laws setting caps on carbon emissions," because without "a regulatory framework, the movement away from fossil fuels is not going to happen."

And finally, Hofmeister called for greater energy education of consumers. "We must teach children energy facts and realities so that we understand what's at stake, so that we don't make rash statements about silver bullet solutions that don't exist," he said.

Hofmeister stressed that these issues will affect all of us: "I would submit to you that your lifestyle and career will depend on energy security. Whatever course you take in life, energy security will touch you," he said.

Hofmeister's lecture was a joint presentation of the College of Engineering's Energy Seminar Series and the Cornell Engineering Alumni Association-sponsored Enterprise Engineering Colloquium.

Graduate student Melissa Rice is an intern at the Cornell Chronicle.

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