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Oil industry - Apr 27

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Video interview with Shell Oil president

Don Shelby, WCCO-TV (Minneapolis-St. Paul, MN)
Don Shelby sat down for an interview with Shell Oil president [John Hofmeister], who has been traveling around the country with a message about how we all need to learn more about energy (20:30).
(11 Dec 2006)
Click on headline (link) to see video.

Contributor Aaron Wissner of Local Future Network writes: This is a fascinating interview, both for what Shell's President says, but also for what he doesn't say. Don Shelby's questions include:

  • How high will the costs of a barrel of oil go?

  • What is your visceral reaction to that? (seeing so many inefficient vehicles on the road)
  • If people were to reduce to 75 mbpd, would price come down?
    Shell: "Energy Drives Economic Growth."

  • Do you believe that conventional oil [defined as cheap oil] is a finite supply?
    Shell: "Yes." "It is in decline and it may have peaked (in the U.S.A) ..."

  • Does it ever make your hair stand on end that Peak Oil might be true?
    Shell: We follow CERA and Daniel Yergin's projections. Maybe in 20 or 30 years.

  • Why might CERA not be wrong about petroleum?
  • Can the oil companies reach 120 mbpd?
  • Are reserves overstated?
  • How can we make sustainable judgements if we don't know if the figures are right? (for Saudi Arabian reserves)
    Shell: "...especially with this Matthew Simmons Peak Oil book..."

  • Will or should that foreign oil ever be considered available for U.S.?
  • Will Saudi Arabia ever get to 12 mbpd?
  • Give me the pitch on unconventional oil, especially the Athabasca Range.
  • What happens natural gas begins to run out up there? (in Canada)
  • What about the environmental damage from the settling ponds?
  • Do you believe in global warming?
    Shell: "We believe the debate is over."

  • Is it Shell's opinion that you can not solve the world's energy problems if people are not educated about energy?
    Shell: "The life blood of the American economy is energy. The life blood of our future environmental sustainability is around how we manage energy."

  • Shell will stay in business a lot longer if people become efficient in their use of energy.
    Shell: "I believe that's true."

The web site for Shell's energy efficiency and conservation effort is www.shell.com/us/energizeyourfuture/

BA writes:
Interviews of oil company executive are not the place to go for revealing information. The execs are responsible for billions of dollars of investments and are not going to speculate or express inward doubts. But for understanding the PR strategies of the oil industry, such interviews are invaluable.

Mr. Hofmeister is polished and persuasive. Interviewer Shelby was well prepared and is knowledgeable on the issues. He and television station WCCO have been an outstanding series on energy, uniquely good coverage for the U.S.

Many of Mr. Hofmeister's remarks sound as if they have been carefully scripted. I'm sure there are "play books" within the oil industry, that ensure that oil spokesmen stay on message. But this is all part of the game... Probably the point of Mr. Hofmeister's appearance here and in many other talks in the past several months is to position Shell as "the reasonable oil company," in contrast to the hardguy image of ExxonMobil. Shell accepts global warming, is willing to worth with environmentalists, is concerned but confident about a petroleum future. And they'd like to be able to drill more in North America.

Mr. Hofmeister mentioned that conventional oil production peaked in the United States. In fact the U.S. peak was predicted in a 1956 speech given by Shell Company employee H. King Hubbert. -BA


ExxonMobil doubles lobby expenditures

Kate Sheppard, Gristmill
Perhaps fearing the coming crunch of climate and energy legislation, oil giant Exxon Mobile more than doubled their reported lobbying expenditures in 2006 to $14.5 million, according to the Center for Responsive Politics. This blows their previous year's total of $7.14 million and next-highest-spender Chevron's $7.5 million out of the water.
(26 April 2007)
Follow links for details.


Energy's Challenges

Daniel Yergin, Forbes
The energy challenge certainly ranks at the top of the world’s agenda. What makes it particularly difficult to deal with is that it is created by two forces.

...[1] the success of globalization. High growth rates, the emergence of large middle classes in countries like China and India, the continuing integration of the global economy--all this is powered by energy. To keep it going requires energy, lots of it.

...[2] the consequences of the use of energy...the build-up of carbon in the atmosphere ... Over the last year or two, a global consensus has come together that this is truly a global problem and that responding is urgent.

...For starters, I will put three ideas on the table. But, before doing that, let us consider the scale of the enterprise. For it is not just the energy the world consumes today, but how much more it will consume in the future. At Cambridge Energy Research Associates (CERA), we've developed new energy scenarios out to the year 2030. The implications are daunting.

In a world of good economic growth, even with greater conservation, world energy demand grows by 75%. This reflects, more than anything else, the tremendous increase in automobile ownership and electricity consumption that will come with rising incomes.

...The first [idea] is a renewed emphasis on energy efficiency, whether in the established infrastructures of the U.S. and Europe, or in the ones that are now being built in China and India. Energy conservation, efficiency, savings--whatever you want to call it is--is a very large resource in itself. It is, without doubt, the biggest near-term way to reduce CO2.

...The second is what I’ve taken to calling the "great bubbling." This is the surge in research and development and innovation that is now taking place all along the energy spectrum--whether in conventional sources or for renewables and alternatives

...The third is to push for the development of carbon capture and storage technologies.

Daniel Yergin is chairman of Cambridge Energy Research Associates, an IHS company. He received the Pulitzer Prize for his book The Prize: the Epic Quest for Oil, Money, and Power and is also the author of Commanding Heights: the Battle for the World Economy. He is writing a new book on energy and geopolitics.
(24 April 2007)

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