DULLES, Va.--(BUSINESS WIRE)--John Hofmeister, former CEO of Shell Oil Co, is a man on a mission. The natural gas and oil industry can solve most of the nation's ills, he told a standing-room-only crowd at the 92nd Annual Gas Processors Association Convention in San Antonio, TX, Monday.
Instead of fighting the politicians, the corporations or the environmentalists, the Republicans or the Democrats, the Red States or the Blue over what's wrong with the country, the U.S. just needs to produce more energy at home, starting with natural gas. Developing domestic gas resources can boost gross domestic product by 5% a year for the next 40 years, creating more jobs and powering the economy.
"Let's just produce more natural gas because we have it, because we can, because it's American productivity going to work. American workers going to their jobs, buying more things in this economy."
"You know what it takes to keep the lights on, to keep the beer cold and have hot showers in the morning," he told the crowd. Not everyone understands what "energy" actually does. "There's so much misinformation," and such "a perversity of partisanship" that it's difficult to get anyone to listen or to get anything done.
Speaking at times in a whisper, and at other times almost in a roar, the former energy executive had almost the entire audience of 2,700, representing 583 companies, on its feet by the time he finished an hour later, NGI’s Shale Daily reported.
"We know what it takes to produce 70 Bcf/d, where we are now. Why stop there? Let's set a target of a minimum of 100 Bcf/d. What would that mean to you? It's a realistic number, given the trillions of cubic feet that we know are available to us..."
Need higher prices to produce more gas? No problem, said Hofmeister.
"Imagine a world that craves natural gas. Let's start with the transportation vehicle market here at home." If the United States were able to eliminate 5 million b/d of imported oil and replace it with U.S.-grown natural gas, "we kiss OPEC goodbye [and say], 'with all due respect, you have extorted enough money from American pocketbooks...'"
Natural gas then would constitute "roughly one-third of the transport fuel that we would use every day in this country," with 12-13 Bcf/d used for compressed natural gas (CNG) and liquefied natural gas (LNG) for trucking and trains.
"Don't stop there," Hofmeister said. "LNG and CNG would be a whole new market nationwide that doesn't exist today. There are 250 million vehicles out there on the highways today. Over the course of the coming years they can be replaced as they retire with vehicles with flex-fuel engines, which can accept alcohol made from natural gas just as well as oil."
Hofmeister, who retired from Shell in 2008, has founded Citizens for Affordable Energy, and last week joined the Fuel Freedom Foundation Advisory Board, which is "dedicated to breaking America's oil addiction by opening the fuel market to allow replacement fuels like ethanol, methanol, natural gas and electric vehicles to fairly compete with gasoline at the pump." The board includes former Central Intelligence Agency Director Jim Woolsey, former Rockefeller Foundation President Peter Goldmark and Co-Director of the Institute for the Analysis of Global Security Gal Luft.
He had encouragement for oil as well, although with the transportation market pressuring prices higher there no longer will be cheap oil.
In the 1970s and '80s, he noted, the United States was producing 10 million b/d of oil. "Let's reset that as a target." With the oil production gains made in the Permian, Eagle Ford and Bakken shales, the United States recently has been able to increase output to 7 million b/d from 5 million b/d. "Why stop there? We know where the oil is. We know we have more than we'll ever need. Let's set a target to 10 million b/d.
"The country needs 18 million b/d. When we get to 10, we'll still need 8.5, but that's a 40% increase from where we are. That will require a lot of infrastructure, a lot of people, a lot of capital...We can do this. Why don't we?"
Congress has to "plot a map" for hydrocarbons from the Gulf Coast to the Northeast, which would "provide 5% higher gross domestic product [GDP] every year for the next 40 years," Hofmeister said. It's doable, he said, but everyone has to agree on a common goal: prosperity for all.
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