Shell Oil president says energy abounds

Shell Oil president says energy abounds


The challenge in meeting increasing demand for energy isn't coming up with new sources of supply, Shell Oil President John Hofmeister believes.
"There's plenty of energy to be had," Hofmeister told a Greater Seattle Chamber of Commerce luncheon at the Washington Athletic Club Wednesday. That energy will come from current and emerging-technology options ranging from offshore oil and gas deposits to Canadian oil sands, Western U.S. oil shale, coal-derived synthetic gas, biofuels, hydrogen fuel cells, wind and solar, he said.
But Hofmeister warned, "The obstacles to getting it are man-made."
Hofmeister, who is on a 50- city speaking tour to discuss energy security, said the primary obstacles are the battles on everything from allowing oil and gas drilling on the outer continental shelf to siting terminals for importing liquid natural gas.
The information-age economy still depends on industrial infrastructure to deliver energy to make it run, he said. "Without energy there's no entertainment," he said. "Without energy, there's no servers running the Internet."
Hofmeister said the country needs a major educational effort so that people understand the crucial role energy plays in the economy and what's necessary to provide it.
"We have to come to grips in a democracy with the fact that energy is the sustaining enabler of our lifestyle and our economic prosperity," he said. Elected officials will decide whether those facilities get built, but people should understand if they don't want them, energy supplies such as liquid natural gas "will go elsewhere."
Hofmeister said another major obstacle is the infrastructure cost for delivering new fuels such as ethanol to consumers. "Today's infrastructure is a product of 100 years" of investment, he said. "How are we going to manage the infrastructure development" required for introducing more ethanol into the nation's motor-fuel system?
Although Shell has a particular interest in cellulosic ethanol (derived from wood chips, plant stalks and other biomass instead of corn), Hofmeister is wary of President Bush's call for a dramatic increase in the production of the fuel. Not only is the infrastructure not in place to handle the higher target, it's not clear yet how consumers will accept a fuel with less energy content than comparable volumes of gasoline and what they'll pay for it.

Shell also is doing development work on the technology of hydrogen fuel cells, which will require yet another system. "I'm not sure consumers will pay for three competing infrastructures," he said.
But Hofmeister said Shell sees itself as a broad-based energy and fuels company. "We're not particularly partial to any one," as long as the public wants to buy it, he added.
Shell operates a refinery near Anacortes. "It's a very well-run, well-managed and efficient operation," Hofmeister said. The refinery mainly processes Alaskan crude, and though that supply has been declining, Shell and Hofmeister are hoping for new supplies from the Beaufort Sea.
Hofmeister also said Shell is shifting its retail business model to one in which local companies develop outlets. Although it's up to those local wholesalers and distributors whether to add stations, Hofmeister said Washington "to us is a growing marketplace. We like to be present in growing marketplaces."