Shell's Hofmeister: "We Need To Increase Oil Supply"
Royal Dutch Shell execs have been talking about the impact of high oil prices on future energy projects--but the company continues to press on with plans despite headwinds facing the sector.
“Increasing supply is best way to affect the price,” says Shell Oil President John Hofmeister.
That’s what the company’s expansion plans for its Port Arthur, Texas refinery are all about. Last month, Motiva--Shell’s joint venture with and Saudi Arabia’s state-owned oil company--broke ground on the $7 billion project that will double the size of that refinery to 600,000 barrels per day. It’ll be the largest in the nation when it’s finished, perhaps by 2010.
“Our job as a supplier is to bring on more supply,” Hofmeister told me when I interviewed him in New York earlier this week.
Even with oil prices staying over $90 a barrel, Shell is staying its course. “It's a very serious inflation issue in the industry today. It's affecting all suppliers,” Hofmeister, who is also National Urban League Chairman, told me after addressing attendees at the Rainbow/PUSH Wall Street Economic Project Conference. “The reason we don't like these excessively, high energy prices is it drives an inflation area spiral, which makes it ever more expensive to do future energy projects.”
But it’s the only way he sees refiners effecting prices: “So we like to increase the amount that we can bring into the economy, increase the available supply of energy because that's the way in which we can affect the price.”
Sure it’s great to embark on alternative energy projects too, but Shell wants more support in developing natural resources right here.
“We think we should open up more access to the Gulf of Mexico, off Alaska. Congress should pass an energy law that grants more access,” Hofmeister said. “We're very happy to see the future of fuels initiatives, but what about the next ten years, the next ten years are critical to the American consumer, which means we need more access now.”
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