After eight presidents of the United States from Nixon to Obama have promised and failed to make this country energy independent, is there any reason why Americans should listen to a former president of Shell Oil USA?
To which I reply, yes. And what’s more, we’d better.
When John Hofmeister retired as president of Shell in 2008, he founded an organization called Citizens for Affordable Energy, which is devoted to promoting sound energy polices for America. He also wrote an excellent book: Why We Hate the Oil Companies: Straight Talk from an Energy Insider.
Mr. Hofmeister is one of the most stimulating and thoughtful commentators on energy policy today, and his expertise and insights were much in evidence in a speech he gave last week at a luncheon hosted by the Houston chapter of the American Petroleum Institute.
Essentially, Mr. Hofmeister argued that energy independence is not only possible, it is absolutely necessary for our national security and economic well-being.
This country, he said, needs 20 million barrels of oil a day. Since it is unlikely that we can produce that amount of oil on our own, at a cost that we can afford, what do we do?
We can continue to import oil—which means that we can remain dependent on the goodwill of the Russians, the Iranians and the Saudis—or can adopt energy policies that will make us, at long last, energy independent. In which case, we can say to the Russians, the Iranians and the Saudis, “Bless your hearts—but we’re done with you.”
This is no impossible dream. According to Mr. Hofmeister, we can produce 10 million barrels of oil a day easily: “Our energy asset base is much larger than we ever imagined. ‘Peak oil’ has been dismissed as a concern for now. The estimated range of oil and gas reserves for the US and North America keeps growing as more is discovered and developed. We’re a long way from running out.”
To meet the rest of our energy requirements, we have a wide range of options. Natural gas can serve as a transportation fuel, as compressed natural gas (CNG), liquefied natural gas (LNG), or gas-to-liquids (GTL)—a refinery process that converts natural gas to gasoline or diesel fuel. Furthermore, said Mr. Hofmeister: “We also have a growing fleet of flex-fuel vehicles that will accept ever more alcohol, higher-octane fuels. In fact, with a software adjustment to the firing systems of virtually all new cars produced in this country in the past decade, we can convert our vehicles to full flex-fuels and use transportation fuels that are mostly alcohol if consumers prefer it.”
Thus, “100 percent of North America’s vehicles can be fueled by 100 percent of North American transportation fuels.”
And that’s not all. “Over an extended period,” Mr. Hofmeister added, “more and more vehicles can and will be electrified by batteries and hydrogen fuel cells, meaning that we can transport ourselves from now to kingdom come without any dependency on anyone ever again.”
But what about the environment?
Here again, there is good news:
“The energy industry is becoming more socially responsible when it comes to sustainability and environmental protection including the management of CO2 and other gaseous wastes, as well as the management of physical and liquid wastes. Cleaner fuels, more efficient use of energy, better methods of extraction and processes of manufacturing all can contribute to a more responsible stewardship within our industry.”
Moreover, Mr. Hofmeister freely acknowledged that becoming self-sufficient in energy will require us to use unconventional energy sources, such as wind, solar and biofuels as well as oil and gas. Nuclear energy can play a role as well. We need a balanced energy portfolio to be self-sufficient.
In short, said Mr. Hofmeister, the real obstacles to energy independence are not practical, but political. At the present time, we are governed by a political leadership whose energy policy amounts to “keep-it-in-the-ground” and remain dependent on unpredictable and undemocratic foreign oil producers.
If that is to change, we need to educate the voting public on the realities of energy: “In a democratic society,” he said, “we are what we know. So let’s make sure that everyone knows about energy, beginning with energy consumers. An educated populace could go a long way towards rational and intelligent consumption and practical public policy.”
This will be a massive education job. Mr. Hofmeister pointed out that since 1992, school systems across the nation have been teaching students about global warming and climate change. But students are not learning about where energy comes from. They are not learning about growth and economic development. Nor are they learning about sustainable growth and clean energy. The one exception is Oklahoma. In Oklahoma, energy education is built into the school curriculum, with support from the oil and gas industry.
Obviously, the energy industry needs to do more to educate the public. Mr. Hofmeister himself teaches the future of energy at three major universities—Arizona State, University of Houston and Kansas State University. One of the requirements to pass his course is that each student has to produce a 50-year energy plan for the United States.
But energy education cannot be left to the industry alone. Knowledgeable citizens must speak out. Mr. Hofmeister ended his presentation with a grim warning: If we don’t control our energy destiny, someone else will.
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