Tuesday, April 30, 2013

Former president of Shell Oil calls for aggressive action on alternative fuels to break oil monopoly on transportation

John Hofmeister, former President of Shell Oil Company and founder and CEO of Citizens for Affordable Energy (CFAE), is joining the Fuel Freedom Foundation (FFF) Advisory Board. Fuel Freedom is 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. CFAE's mission is to educate citizens and government officials about pragmatic, non-partisan affordable energy solutions.

"The purpose and the focus [of FFF] is exactly in line with what I promoted as president of Shell and subsequently as the founder of CFAE," Hofmeister said to Green Car Congress. "From [these organizations' standpoints], the reason we have to get away from doing nothing is that the public doesn't fully appreciate or understand the situation it faces with respect to fuels' futures."

We exist to 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.

-John Hofmeister

In his 2010 book Why We Hate The Oil Companies, Straight talk from an energy insider, Hofmeister suggested that Americans would be facing the beginning of gasoline lines in the 2016-2020 timeframe.

That onset of what he calls the "beginning of the energy abyss" was predicated on normal economic growth, including China's growth, he noted. Since writing the book, economic growth has been "stunted", and China's growth reduced. That, he suggested, might stretch out the beginning timeframe a little further.

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.

-John Hofmeister

There are many options theoretically available, Hofmeister said, includingnatural gas for multiple transportation fuel applications: LNG, CNG, GTL synthetics, methanol for personal vehicles, even gasoline from natural gas. The organizations are also pushing electric vehicles as an important options, whether battery-based or hydrogen-fuel-cell based.

Analysis of the viability or attractiveness of the different options should rely on a mix of cost, resource availability, and carbon footprint, he suggested.

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. Fuel Freedom's approach to opening the fuels market by breaking the oil monopoly is America's next giant leap forward.

-John Hofmeister

In terms of taking steps forward, Hofmeister suggests that "first and foremost" there should be a serious, twin-path discussion on the future of natural gas as an alternative fuel, with specific focus about what works best for trucking and trains, and on what works best for personal vehicles. "Let's see what the market does to grow both, the industrial side and the consumer side. We haven't had that conversation yet."

Further, 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 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.

-John Hofmeister