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Day 941: Shell Oil President On Charlie Rose

Guess it’s not cartoon, Food Network and UFO Hunters night at Casa M&D. Bush’s War on PBS Frontline is over. On to John Hofmeister, recently-retired president of Shell Oil, on Charlie Rose.

Right off the bat, Hofmeister expressed two sentiments that strike me as surprising/refreshing coming out of the mouth of an oil company executive: America has not made oil parsimony a matter of national pride. Additionally, it is the responsibility of federal, state and local governments to slap tariffs on energy abusers. As for the latter comment, let me assure you how thrilled I am not discovering hydrocarbon reservoirs that will fuel, for example, single-driver Hummers and F-350s that have never been off-road, much less over a pebble.

The rest of the program is a predictable dance; Charlie Rose conducts the interview from the perspective of the concerned environmentalist, while Hofmeister is an experienced oil-company spokesman. Following are interesting comments to ponder:

– Hofmeister points out that, in terms of positioning Shell for the future, Shell is very much an oil company, but underpinning this is a technology company, which makes 1, 5, 10, 25, 100 year outlooks. True that, I could write volumes about Shell’s and Chevron’s technological wealth, which resides mainly in the heads of their scientists and engineers. A real tragedy is that hiring did not keep up during the oil bust of the late 1980s and many of these folks will reach retirement age in the next few years. Oil companies’ intellectual assets have already begun to leave taking all that brilliance with them. Along with universities graduating increasingly less petroleum technologists, you could say that the oil industry faces a minor resourcing crunch.

– “Americans use 10,000 gallons of oil per second, not a minute, a second.”

– I’ve noticed that a number of disparate folks, from Herr Doktor Brother to Shell executives, place an immense amount of faith in nanotechnology as the wave of the future, as soon as ten years from now.

– “Politics is the root of the lack of progress. And the image of the oil industry has not helped.” This statement led into the need for a national energy security policy.  Immediately, I questioned if this is a policy that involves oil exclusively.

– “We’re not climatologists, but action is needed [on global warming].”

– “We’re for reducing emissions by increasing miles per gallon [through hybrid vehicles, hydrogen cells, etc.]”

As an oil industry geophysicist, the solution as I see it is not in world governments making laws and in Shell and other oil companies enacting resolutions and initiating research for a less-hydrocarbon-dependent future. While these are good first steps, the real answer lies in the combination of consumer ownership of the problem, unfettered research and law enforcement.

7 comments… add one
  • RW Twain March 26, 2008, 4:22 AM

    Nice blog– was drawn here by your comment on John Hofmeister’s appearance on Charlie Rose. From my perspective, I haven’t seen an oil exec be as candid and inspiring as Hofmeister since the Dutch Shell exec served tea to protesters on his front lawn in “The Corporation.” Hofmeister’s comments went beyond the profit motive of Shell to examine the social and economic quagmire that has resulted from the United States’ dependence on foreign oil. He put forth a clarion call for a “national energy security” plan that does not rely upon raping foreign lands, but rather will depend upon the domestic development and “scaling up” of second generation fuels and the concomitant adoption of cleaner mass transit. The expanse of his knowledge on the subject and the issues he presented were truly sobering for me. Your comments regarding the aging population of the industry’s technologists and the consequent loss of institutional knowledge caused me to believe the the country’s energy problem is even larger and more immediate.

    Thanks for spreading awareness of the Hofmeister interview with your post and, of course, the opportunity for me to further my thoughts.

  • HammHawk March 26, 2008, 9:09 AM

    Maitri, do you think that the company one supports matters in this industry? I have NOLA-vehement friends (and a neighbor who’s an engineer for Shell) who insist that the company deserves props for sticking by the city; as a result, it’s the only place they buy gas. I tend to agree, partly because I tend to think of these companies as all the same, but this is something that separates Shell. But I’m pretty ignorant of the issues. Any thoughts?

  • Maitri March 26, 2008, 10:52 AM

    RW Twain: Understandably, an oil company’s efforts to move away from 1st-generation fuels needs backing by the government in terms of policy, but

    a) it is the company’s responsibility to move towards a cleaner future (if for nothing else, to keep itself afloat and relevant) despite current political trends. In other words, the art of lobbying and keeping lawmakers in line with future vision are also within the abilities of oil companies, and

    b) there was very little talk about the concurrent responsibility of automakers to scale back on the production of gas guzzlers, This works into the whole national pride in conservation that I brought up in the post.

    We as a country sorely need a conversation which will outline how long we, i.e. government, oil companies, automakers and consumers, plan to stay dependent on gasoline and how much domestic discovery and production this will entail and stick with the plan. I understand that such an agenda is dependent on research and infrastructure change, but we need to start somewhere.

    ==

    Hawkster: I couldn’t parse this question: “do you think that the company one supports matters in this industry?” As for the rest of your comment, they’re not all the same. There are those who will not work for Exxon and, conversely, those who will not work for Shell, as examples. Employment-wise, it is about fit. For me, the good fit is that Shell recognizes my disparate set of skills and is an excellent technology company with an active research lab.

    Is a company a good steward in your community? How do its employees view working there? What research does it promote and conduct? Do you believe that that company’s gasoline is better for your vehicle? Where does the company see itself in a decade, two decades, and so on? These are some of the issues to research and ponder before passing judgment. There, too, it’s about fit: how does this company fit in with your values?

  • HammHawk March 26, 2008, 2:12 PM

    Yeah, I would’ve marked that sentence from a student with “awk.” I meant to ask whether I should put much thought into where to buy my gas. Thanks for your insights.

  • Maitri March 26, 2008, 2:46 PM

    The only factors that would affect my decision to buy gas somewhere are cost and quality. Other than that, it’s all the same to me.

  • Clay March 26, 2008, 10:03 PM

    As a subcontractor, here’s my take on all the oil companies I’ve worked for:

    * The Independents: best in the biz. Lean and mean. A pleasure to work for because of their “get it done” attitude.

    * BP: Not the brightest sharpest tools in the shed.

    * Chevron: Pain in the ass to work for. Also, not too prompt in paying.

    * Exxon: OK, but every once and a while are obscenely cheap about minor stuff. When they’re making $4,000 profit a second, it’s obscene to even us.

    * Shell: Overall, pretty good. Conservative. One big flaw: WAY too many meetings.

    That’s my view from below, anyway. I’m way down the food chain, though.

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