October 29, 2006
Shell's Portland Oregon "Town Hall Meeting"
By: Rowan Wolf
I attended one of Shell's "National Dialogue on Energy Security" on October 27th. This is part of a 91 city tour by Shell President John Hofmeister and a few staff to have "discussions" across the nation. Portland, Oregon is one of Shell's "markets" and was stop 14. It was interesting and informative, though not necessarily in the way Mr. Hofmeister intended.
I went expecting a sit-down meeting where Shell would give us some background and we would get to ask questions and express concerns. It did not work quite that way. We went into a conference area at a local hotel where hors d'oeuvers and a hosted bar were set up. Also present were three easels around the room with questions on them. The questions read:
- What should Shell be doing to increase domestic supply?
- What is your vision of the U.S. energy mix in the next 10 years?
- What does the U.S. need to do to manage energy demand?
Shortly after my arrival, Mr Hofmeister started off with a brief welcome and an explanation of what we were going to be doing. It was clear from his comments, that in part, the "Town Hall" and the town hall tour, were about image. While not an exact quote, he said that folks were looking at big oil and the very big profits and checking the cash flowing out of their wallets at the gas station. Shell, was collecting information about how consumers thought Shell should be investing all that profit. He also said that he didn't see big oil as big oil. Rather, they were lots of little oil companies and individuals engaged in energy production.
In explaining the plan for the evening, he introduced three of his managers: Bill Spurgeon - station manger for 16 western states; Paul Hamilton, head of the alternative energy resources division, and Barbara Komylo who is in charge of government relations for 6 western states (please excuse any misspelling of their names). Each of these individuals briefly introduced themselves and took their places at one of the easels. The "public" was to go to each easel and offer questions and comments.
In other words, this "town hall" was a variant of a focus group. The bottom line? To provide Shell with information on how to address public concerns regarding energy and oil company responsibility.
The Shell managers got asked a lot of questions, but were not unilaterally forthcoming in responding to them. They were pleasant, friendly, engaged, and attentive, but they were clearly trying to capture response and not to inform us.
After roughly a half hour of this "dialogue," we were called back together, and each easel minder was asked to summarize what happened at his/her easel.
There were some striking points in the event. The four that bear the most notice were global warming, diesel costs, Shell's research and development focus, and domestic oil supply. Of note, Hofmeister stated that as far as Shell is concerned, the debate over global warming is over. He stated that 90% of world leaders are telling Shell that now is a time for solutions to global warming. He also explained why diesel is so expensive in the United States. Apparently, Britain is the reason, or at least British policies. Diesel is promoted in Britain, and gasoline taxes help subsidize diesel costs. Therefore, British demand makes the U.S. diesel prices significantly higher.
However, the last two tidbits were the most revealing. Shell is focusing its efforts on "clean coal" and hydrogen technologies. On the latter, Mr. Hofmeister predicted the "death of the combustion engine" in the not so distant future. That says something about the overall availability of oil. Also of note was the admission that the U.S. cannot not become energy independent - at least not in terms of oil. He said that the U.S. needs 18-20 million barrels per day, and that all sources of domestic supply - if fully tapped - would only provide about 8 - 10 million barrels per day. Something most folks who watch oil issues are well aware of.
Hofmeister's numbers are both instructive and revealing. He is stating that the most the United States can expect out of domestic supplies is 50% of demand (20 million demand, 10 million supply). That 50% includes being able to access all known reserves. Currently, domestic supply is roughly 44% of oil used (according to the National Energy Technology Laboratory based on 2003 data). This means that we would only be able to provide an additional 6% of our own supply if we exploit all sources - ANWR, off shore, in the Gulf of Mexico (the new "mega find" of deep oil), and all known internal reserves. That is very bad news indeed. It is particularly bad news since US demand is expected to increase another 38% by 2030 (NETL).
That means that by 2030 we will be consuming 27.6 million barrels per day which will increase the demand for imported oil to 68%. Since 97% of oil used in the US is used for transportation (NETL), it is no surprise that the combustion engine will "die."
Hofmeister's predictions also point to the deceptiveness of talks of "energy independence" and "energy security." Even if we suck oil and gas down to the last drop and we did it tomorrow, the U.S. could not continue on its current path without access to global reserves. Further, like U.S. supplies, those "resources" are not limitless and they are in growing demand.
But there is another issue that is blatant, but not obvious. There are well over 300,000 million vehicles in the United States, and virtually all of them are combustion engines dependent on oil. Where does the steel, rubber, copper, petroleum derivatives come from to replace those 300,000 million plus vehicles? You know that these new technologies are going to be released (if it ever happens) in new vehicles.
These realities prompt a series of ethical questions. Given the total dependence of the United States on hydrocarbons, and the indisputable fact that we can't now or ever meet our own levels of demand (assuming the status quo and projected growth):
1. Should we push for access and control of the resources of other nations and other peoples to meet our own demand?
2. Should we exhaust all oil and gas reserves regardless of the destruction that will inevitably result?
3. Do we, in this generation, have the right to completely exhaust such valuable resources - thereby depriving the next generation and the next of it?
These are questions that don't get discussed. They are questions that politicians, oil companies, and the public do not ever consider - much less raise.
While these are the realities, and in his own way the President of Shell Oil stated them plainly, he did not suggest turning away from the protected regions such as ANWR. He did not hint at any modification in direction by Shell in providing as much of the supply as possible. He did not answer, but also did not deny, Shell's interest in Iraq's oil reserves which was one of the questions posed to him.
Perhaps these ethical questions do not get asked because we assume that they are already answered. Of course, we should "ensure" the control and access to the resources of the world for our own "interests" and security. Of course we should use all the resources that exist, despite the destruction, because we "must" do so. We cannot "afford" to change course. Of course we should exhaust the hydrocarbon supply of the planet. Technology will give our children and their children some other answer to the energy problem - we hope.
Posted by Rowan at October 29, 2006 6:49 AM Category: Peak Oil