John Hofmeister

Our discussion I initiated over energy & oil policy couldn't have been timed better. With the release of Exxon's numbers today its been all over traditional media ands the conservative radio rounds. And so has the man above. From GMA to Glenn Beck he's been everywhere today. You can Google his name online or on You Tube. He is a very thoughtful, knowledgeable and pragmatic man. Until recently he was the CEO of SHELL. I just listened to a half hour long interview with him, here are some highlights:

1.) He said that oil companies have done a "deplorable" job in communicating to the public what they do. The vast majority of their operating is manufacturing oil into fuel, not pulling it out of the ground, thus they have very limited impact on what a barrel goes for on the world market. And the tax incentives they are afforded are the same for all large manufacturers in the US, regardless of "what" they manufacture - no special treatment in the tax code. He says at least 50% of their bad press is their own fault.

2.) Currently the greatest short term problem is two-fold. a.) He is prohibited by law from executing new drilling within 100 miles of the coast of Texas. The problem is that the rich oil reserves beyond that mark are 7 miles under the ocean's surface and that process is excruciatingly expensive. b.) Each barrel of oil he pulls domestically sits in the barrel unrefined for up to 6 months because there has been a government induced moratorium on new refineries for the last 30 years. He can't convert the stuff fast enough. Shell, with all its billions, has only 10 operating refineries in the US at present. The government has hamstrung any further construction since 1977.

3.) Even though US oil companies produce/drill a small percentage of the oil they refine it doesn't have to be that way. 85% of the Arctic Intercontinental Shelf is off limits. They simply can't tap the sources they would like to, and even if they did they couldn't refine it at a proficient rate.

4.) Prior to his recent retirement Hofmeister allocated one of the largest set of funds for Hydrogen cell technology. He is insistent that the oil companies are rapidly seeing themselves as "energy companies" instead. What do you want to bet their R&D is moving quicker then the governments? And for less money.

5.) Just before his retirement he went on a 50 city tour, met with 26 mayors and 25 governors in order to gauge (not gouge) the effect of high prices on the ground first hand, in particular the inner cities where rising fuel and food costs have their most dramatic impact.

6.) Having toured that many US sites he know advocates a single federal emissions cap, versus the state by sate system now in place, and an emissions selling buying credit system. This will allow both a cap on emissions for those concerned with its environmental impact and these "energy companies" to project just what their cost will be on a single rate, rather then 50 varying ones, adding some much needed stabilization to the price of gas.

7.) He has put his own money into a new NGO that will lobby on behalf of energy consumers so that the practical need of fuel by the US can be explained to law makers on a routine, layman's terms basis and so that their will be a consumer advocacy group, non-related to oil companies or OPEC, that can lobby the government in a way to balance out environmental lobbies. Not that he's not environmentally conscious, he is, he just wants to add some frank, pragmatic voices to the discussion on how to make America first energy proficient, then independent, and given the US uses 10,000 gallons of oil per second (that's a swimming pool per second!), the move to alternative fuels, while eventually necessary, must be done in a common sense way.

Imagine that, a consumer advocacy group founded by an oil company CEO.

8.) Nuclear and sugar based energy must be embraced by the US congress, and the bipartisan nonsense paralyzing such industry, is a threat to national security.

Now, name me the politician, Canadian member of parliament, Algorian chowder head, or OPEC representative whom has even half the ideas or answers this one man has proposed.

Go ahead Titus, keep bad mouthing these oil companies if you want to, and ask that your representative induce even further, choking regulations, and see how that works for you. CLEARLY "big" oil, at least represented by Shell, is part of the solution, not the problem.

If our energy dependence is more of a threat to National Security then Bin Laden, as Jambo suggested, then Hofmeister is a patriot.