Avoiding the ‘Energy Abyss’

John Hofmeister doesn’t call it ‘peak oil,’ instead he calls it the ‘energy abyss,’ the point at which the global economy ceases to grow because the oil industry can no longer meet demand.

Hofmeister is the former president of Shell Oil, the same Shell Oil that is preparing to drill the deepest hole yet drilled to reach oil and gas 200 miles out in the Gulf of Mexico in 9,500 feet (2,900m) of water, surpassing the working depth of Shell’s Perdido rig, also located out in the Gulf and producing around 100,000 barrels a day. The cost of that rig: $3 billion.

 

ABOVE PHOTO: Shell Arctic oil rig Kullak runs aground during storm, contributing to the company’s decision to cancel offshore operations for 2013 season

In his 2010 book, Why We Hate The Oil Companies, Straight talk from an energy insider, he wrote the following:

“It’s inevitable. The industry that produces oil can’t produce enough, unless the world doesn’t grow. It’s possible that we will have such expensive oil that we will stymie growth. How many people will suffer? How many poor will become poorer, while rich become richer because we have failed rational tests of creating alternative competitive fuels? We have a choice to condemn ourselves to an energy abyss in the name of the status quo and lack of enlightened leadership, or we can choose to develop alternatives.

Why aren’t we more thoughtful about the future? Why don’t we begin the journey towards a range of alternatives that delivers increased national security, increased economic security, and multiple choice for consumers?

I think in this regard, we are missing in the whole construct, a meaningful voice of government as an intermediary and an enabler to a better future when it comes to fuel choice. The US has been crippled for 7 years by high-priced fuel; the government has done nothing to speak of to address the issue.”

While Hofmeister’s last statement may not be entirely true – the Obama Administration has placed a priority on improving the fuel economy of automobiles and promoting greater use of electric vehicles – the sad truth is, Congress has fiddled while Rome burned when it comes to a comprehensive national energy policy, It’s been left largely to the states to create their own programs through renewable energy portfolio standards, for starters.

From his oil and gas industry perspective, the former Shell chief wants to see a serious push for the use of natural gas in both trucks and trains, a position he shares with T. Boone Pickens.

He writes, “We need a competitor for oil. We need to open the market to replacement fuels like methanol, ethanol and natural gas. Competition will drive transportation fuel prices down, structurally and sustainably. These fuels are well within our reach, we can implement them into our existing system without the need to wait twenty years for fleet turnover.”

Perhaps somewhat surprisingly, Hofmeister also endorses the role of electric vehicle technology in personal passenger cars. Notes Green Car Congress in their analysis of Hofmeister’s views, see electric vehicles as “important options, whether battery-based or hydrogen-fuel-cell based.”

Writes Mike Millikin, the author of the article, “Hofmeister suggested, that even though EVs are off to a slow start, the US should continue to enable the infrastructure to be built to enable both types of electric vehicles, battery and hydrogen.

“I think,” states Hofmeister, “hydrogen fuel cell capability in the next 20-30 years will be more than people give it credit for. It’s not a fix for tomorrow, it’s too soon. But with the work going on and cost reductions already accrued in fuel cells and vehicles…I would hate to be taught by Japan and Germany how to do it, how to develop the infrastructure for hydrogen fuel cell vehicles. But that’s quite possible.”

Since leaving Shell Oil, Hofmeister has joined the Fuel Freedom Foundation (FFF) Advisory Board, described as a “non-partisan, non-profit organization dedicated to opening the fuel market to allow alternative fuels such as ethanol, methanol, natural gas and electricity fairly to compete with gasoline at the pump.”

He is also the founder and CEO of Citizens for Affordable Energy. The mission of both these organizations, he states, “better educate the public, to have the conversations that need to be had with government, corporate executives, NGOs, with all sectors of society, on future alternatives.”

“We have to look at the fuels marketplace from a short-, a medium-, and a long-term perspective. There will not be enough oil to stay on the path we’re on globally over the short- and medium-, let alone the long-term. By the time we meet China’s needs, India’s needs, the developing world’s needs, there just is not enough supply to rely 100% on oil as a transportation fuel. It’s not going to happen.”

Peak oil, energy abyss? The effect will be the same regardless of its name.

EV World