“If for some reason that oil weapon becomes a Saudi response, and they may get other friends to join them in responding with an oil effect, the whole world economy could be shaken by a shortage of oil.”
This is the week we show our respect and gratitude to veterans for their service to our country. But that sentiment doesn’t have to be reserved just for Veterans Day.
John Hofmeister went on CNBC on Thursday to talk about the current and future price of oil, and he gave viewers more to think about when he elevated the discussion to include the need for alternatives to meet the world’s growing appetite for transportation fuel.
The global oil trade is a “contrived market” not subject to the usual laws of supply and demand, and the United States has an “absolute requirement” to use alternatives if it hopes to wean itself off imported oil, former Shell Oil president John Hofmeister said during the keynote speech at the National Ethanol Conference. Read more
We hope you’re enjoying cheap gasoline for the holidays. Because the party will end sooner or later, and the hangover will be a doozy.
Ever since oil prices, and with them gasoline prices, began plummeting last fall, the trend has been portrayed in varying forms as a “gift” or an “early holiday present” or a “tax rebate” for consumers, who are expected to give thanks for this free stuff.
The last time John Hofmeister saw Phil and Cheryl Near, they were on the same side, selling oil and gasoline to the public. Alternative fuels were part of the equation, but they were just getting started.
Just in time for the Fourth of July weekend: Our very own John Hofmeister speaking words of wisdom about the need for the United States to wean itself off oil as its dominant transportation fuel.
“It’s incumbent upon the United States of America to become more oil independent,” Hofmeister said at a security conference in Israel in June. “Because it still relies on nearly 7 million barrels a day of imports, and in a nation that uses 18 and a half to 19 million barrels of oil per day, the loss or the risk of 7 million barrels a day of imports puts that nation at about two-thirds of independence, and that’s not enough for the world’s largest economy.
“So there remains an interdependence, until the U.S. can find independence, and it has every right and every responsibility to pursue independence. As does every other nation.”
Watch Hofmeister’s full talk at the Herzliya Conference in Tel Aviv:
Hofmeister knows of what he speaks: He was the president of Shell Oil Co., the American subsidiary of oil giant Royal Dutch Shell, from 2005 to 2008. The author of “Why We Hate the Oil Companies” now travels the world talking about the need for alternatives to oil. He’s not only on the board of directors and advisors at Fuel Freedom, he founded a nonprofit called Citizens for Affordable Energy.
U.S. crude prices closed at $56.96 a barrel Wednesday, down $2.51 or 4 percent, the biggest one-day drop since April 8. Compare that to last summer, when the price was above $100. But the market remains volatile, and Hofmeister said having oil at an affordable price long-term is necessary for national security.
“If you’re not taking care of yourself, no one else will,” Hofmeister said. “And so nations should look to their security — not just to their defense forces, but to their energy supplies — which in the United States, is why I’m almost entirely focused now on transitioning natural gas to transportation fuels, as well as biofuels, as well as electricity for transportation. Because the future of oil is simply limited. We’re not running out. It won’t disappear. But it simply won’t be available at this price for an indefinite future.”
Hofmeister expanded on another of his major themes: that natural gas, which is cheap and plentiful in the United States, could help the U.S. and other nations reduce oil consumption. Natural gas is used as a fuel in its gaseous, compressed form — as CNG and LNG — and it can also be processed into liquid alcohol fuel, ethanol or methanol.
“Over the next decade, nations like the United States, or like Israel, or like much of Europe if not the whole of Europe, that are not transitioning at least a third of their oil demand away from oil and toward natural gas will only look back in regret.”
(Photo credit: Poet Biorefining plant in Macon, Missouri. From FarmProgress.com)